British house prices rose at the fastest pace since February 2023 in the 12 months to September, figures from the Office for National Statistics showed on Wednesday.

The average house price in the United Kingdom in September was 2.9% higher than a year earlier at £292,000, accelerating from a 2.7% annual increase in August.

Private sector rents in October were 8.7% higher than a year earlier, the biggest annual increase since May.

Industry reactions:

Nick Leeming, chairman of Jackson-Stops, said:  “The figures, running six weeks behind reality, offer an air of calm confidence. The late Autumn Budget spurred buyers to push completions over the line before any policy changes could disrupt the status quo. No doubt investors who were nervous about possible Stamp Duty and Capital Gains tax rumours were pushing for transactions to complete before the end of October. This practical perseverance is evident across the Jackson-Stops network, with instructions steady and a slight increase in prospective buyers on an annual basis.

“Areas such as Chichester, Ipswich, Northampton, Sevenoaks, and Woburn all saw a bounce in instructions in October, but demand in these areas from new buyers far exceeds new listings. The hope is that the Government’s commitment to build more than a million new homes does help to address this supply shortfall but not at the expense of market confidence.

“As well as the lack of stock, what will hold buyers back is mortgage affordability. Despite the base rate being cut to 4.75%, this reduction is not yet feeding through into mortgage rates due to external headwinds. But the market should take confidence from the fact that activity levels are up year on year. As we approach a traditionally quieter period,  the market can take comfort in a much more resilient and certain ending to 2024 than much of this year had suggested.”

Iain McKenzie, CEO of The Guild of Property Professionals, commented: “As we approach the closing of the year, the industry is in a much more positive situation than this time last year. Another month of house price growth shows that demand for housing is robust.

“London remains the only part of the UK experiencing negative house price growth, though this will come as no surprise to renters in London who have felt priced out of the market for years. With double-digit rent inflation in tow, the capital is becoming increasingly more difficult to afford to live there.

“First-time buyers looking to secure a favourable mortgage deal will be happy to know that market conditions are better now than they have been all year. Interest rates have fallen in the past month which should entice lenders to roll out better offers.

“While inflation was widely expected to creep up today, as a result of rising energy prices over the winter, it dashes hopes of another interest rate cut before Christmas.

“The coming months are typically a quieter time for estate agents and provide a chance for them to encourage homeowners that now is a good time to sell up.

“The winter could be a litmus test for the industry. If house prices and demand hold steady, it is likely that any minor changes in inflationary pressure and interest rates will still keep the market firing on all cylinders.”

Matt Thompson, head of sales at Chestertons, said: “In September, sub-4% mortgage products as well as lower interest rates motivated house hunters to start or finalise their property search. This uplift in buyer interest enticed sellers to put their property up for sale which provided buyers with a larger pool of properties to choose from.”

Emily Williams, director of research at Savills, commented: “House prices continue to tick up, with annual price growth in the year to September 2024 reaching 2.9%. Growth in September was driven by easing mortgage rates, and the strongest performing regions were Scotland, the North West, and Yorkshire and the Humber, which benefit from the best underlying affordability.

“We expect this pattern of growth to continue over the next few years. Despite some recent increases in mortgage rates, debt is cheaper than it was at the start of the year, and the Bank of England is likely to make more cuts to the base rate next year.

“Savills has forecast that mainstream values across the UK will grow by 4% next year, with the strongest areas in the north of the UK expected to see prices increase by 5%.”

Nicky Stevenson, managing director at Fine & Country, said: “House prices rose in September, highlighting the property market’s resilience amid broader economic uncertainties and economic policy shifts.

“In the lead-up to October’s Budget Day, speculation around tax increases and their potential effects on the housing sector was widespread. However, September’s price increases — both annually and monthly — highlights sustained demand and buyer confidence.

“Looking ahead, while concerns linger following the Chancellor’s announcements, other economic indicators signal a potentially strong finish for the property market in 2024.

“The Bank of England’s recent rate cut — its second this year — is expected to ease mortgage rates. However, some lenders have reacted to the budget by raising rates on certain products. Whether this is a temporary adjustment or the start of a longer-term trend remains to be seen.

“Meanwhile, today’s data shows inflation climbed by 2.3% in the year to October — the highest in six months. Nevertheless, it remains close to the government’s 2% target, offering a degree of economic stability.

“The property market continues to demonstrate exceptional resilience in the face of uncertainty. To sustain this momentum and strengthen buyer confidence, policymakers and lenders must prioritise accessibility and affordability, particularly for first-time buyers.”