The average UK house price has hit a new record in September, pushing over £225,000 for the first time, according to an index.
Nationwide Building Society said the average UK house price was £226,129 in September – the first time it has been above the £225,000 mark.
In August, the average house price was £224,123.
House prices increased by 5% annually in September, marking the highest growth rate in four years. Prices increased by 0.9% month-on-month.
Robert Gardner, Nationwide’s chief economist, said: “UK house prices increased by 0.9% month-on-month in September, after taking account of seasonal effects, following a 2.0% rise in August.
“As a result, there was a further pick up in annual house price growth from 3.7% in August to 5.0% in September – the highest level since September 2016.
“Housing market activity has recovered strongly in recent months. Mortgage approvals for house purchase rose from (around) 66,000 in July to almost 85,000 in August – the highest since 2007, well above the monthly average of 66,000 prevailing in 2019.”
He said the rebound reflects several factors.
Mr Gardner said: “Pent-up demand is coming through, with decisions taken to move before lockdown now progressing.
“The stamp duty holiday is adding to momentum by bringing purchases forward. Behavioural shifts may also be boosting activity as people reassess their housing needs and preferences as a result of life in lockdown.”
However, research by Nationwide also indicates that some people are putting off moving home, particularly younger people.
This may reflect concerns about employment prospects, Mr Gardner said.
He continued: “Indeed, most forecasters expect labour market conditions to weaken significantly in the quarters ahead as tighter restrictions dampen economic activity and the furlough scheme winds down.
“While the recently announced jobs support scheme will provide some assistance, it is not as comprehensive as the furlough scheme it replaces.”
Looking across the UK, Nationwide said most regions saw a slight pick-up in annual price growth in the third quarter of this year (between July and September).
Average prices in all nations and regions are higher than a year ago.
Mr Gardner said: “The South West was the strongest performing region, with annual price growth rising from 2.3% to 5.5%.
“For the first time since 2017, house price growth in southern England (London, Outer Metropolitan, Outer South East, East Anglia and South West) exceeded that in northern England (North, North West, Yorkshire and Humberside, East Midlands and West Midlands).”
Annual house price growth across the areas defined by Nationwide as southern England stood at 4.7% in the third quarter of 2020, up from 1.9% in the second quarter.
Across northern England it stood at 3.7%, up from 2.1% in the second quarter.
Mr Gardner added: “Scotland was one of the few areas to see a slowing in the annual rate of price growth, to 2% in quarter three, compared to 4.0% in quarter two.
“Meanwhile, Wales saw annual growth accelerate to 3.8%, from 1.0% in quarter two.”
Here are average house prices across the third quarter of this year and the annual change, according to Nationwide Building Society:
– South West, £260,316, 5.5%
– Outer Metropolitan (includes Basildon, Dartford, Epping Forest, Harlow, St Albans, Stevenage, Watford, Maidstone, Reading, Slough, Guildford, Woking, Tunbridge Wells, Windsor and Maidenhead) £376,682, 5.0%
– Outer South East (includes Aylesbury Vale, Bedford, Braintree, Brighton and Hove, Canterbury, Colchester, Dover, Isle of Wight, Milton Keynes, New Forest, Oxford, Portsmouth, Southampton, Thanet, Uttlesford, Winchester and Worthing), £291,404, 4.8%
– Yorkshire and the Humber, £167,816, 4.6%
– London, £480,857, 4.4%
– North East, £132,898, 4.2%
– East Midlands, £194,749, 4.0%
– Wales, £165,423, 3.8%
– West Midlands, £200,622, 3.1%
– North West, £171,675, 3.0%
– East Anglia, £238,896, 2.7%
– Scotland, £153,347, 2.0%
– Northern Ireland, £146,152, 1.5%