UK house prices have risen at their fastest annual pace for two years this month.
Nationwide’s Latest Figures
According to new figures released by Nationwide, the average property price rose by an annual rate of 3.2%, which is a 0.8% increase from August, and is the fastest rate seen since November 2022. This means that the average house price in the UK is now up to £266,094.
Why are Property Prices Rising?
The rise in property prices is in part due to falling mortgage rates encouraging an increased demand for houses.
Robert Gardner, Chief Economist of Nationwide, commented “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. 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.”
House Price Indices
You can use the Nationwide house price index find out how much you might be able to fetch for your property, and how this has changed over time.
Please bear in mind that this tool is intended as a rough calculation to act as a guide rather than an accurate valuation, as it does not take into account the price movements in specific towns and cities, or any value added through renovations and home improvements. For an accurate property valuation, you should consult an estate agent or surveyor.
The data used by Nationwide is the lender’s valuation at the mortgage approval stage, which can sometimes differ from the actual selling price. However, this stage is close to the end of the home-selling process so tends to provide a more realistic view than using initial asking prices, which is what is used by some house price analyses.
For example, Rightmove’s house price index is based on asking prices, which is one of the initial stages of the home-buying process. This allows them to pick up on price trends very early on but reduces their accuracy, as there can be a big difference between the asking price and what the home eventually sells for. Sellers may not even end up selling the property at all, instead taking it off the market completely or choosing to sell it at a later date for a different asking price.
The Land Registry also provides an analysis of house prices, working on a two-month lag, meaning the most recent figures are for July. The Land Registry’s UK House Price Index says the average UK property increased by 2.2% between July 2023 and 2024.
As well as Nationwide, The Land Registry and Rightmove, there other property price indices that can be used to help see what trends are taking place with house prices, such as Halifax and Zoopla.