UK house-price growth accelerates in September

House prices in the UK rose at their fastest rate in nearly two years this month, with values now just 2% shy of record highs, according to data released on Monday by Nationwide.

The UK house pice index increased to a reading of 529.4 in September, up 0.7% from August, following a 0.2% dip previously.

Compared with September 2023, prices were 3.2% higher at an average of £266,094, the fastest annual rate since November 2022.

"Income growth has continued to outstrip house price growth in recent months while borrowing costs have edged lower amid expectations that the Bank of England will continue to lower interest rates in the coming quarters," said Nationwide's chief economist Robert Gardner.

"These trends have helped to improve affordability for prospective buyers and underpinned a modest increase in activity and house prices, though both remain subdued by historic standards."

Over the third quarter as a whole, prices were up 2.5% on last year, increasing across all but one of the major regions, with only East Anglia registering a decline (-0.8%). Northern Ireland saw the strongest annual growth (+8.6%), following by the North West (+5.0%), Scotland (+4.3%) and Yorkshire and the Humber (+4.3%).