According to the report, prices in the three months to September were 4.0% higher than in the same three months a year earlier. The annual rate in September is higher than in August (2.6%) and at its highest growth rate since February.
The Halifax data shows that house prices rose by 0.8% between August and September, following a 1.5% increase in August.
Total UK home sales remained flat in August but still exceeded 100,000. Sales in August remained unchanged from July and exceeded 100,000 for the eighth month in succession. In the three months to August home sales were 1% higher than in the preceding three months. (Source: HMRC, seasonally-adjusted figures)
Mortgage approvals for house purchases fell in August. After rising to their highest level since January.
Russell Galley, Managing Director, Halifax Community Bank, said: “The annual rate of growth has picked up for the second consecutive month, rising from 2.6% in August to 4.0% in September. The average house price is now £225,109 – the highest on record. House prices in the three months to September were 1.4% higher than in the previous quarter, the fastest quarterly increase since February.
While the quarterly and annual rates of house price growth have improved, they are lower than at the start of the year. UK house prices continue to be supported by an ongoing shortage of properties for sale and solid growth in full-time employment. However, increasing pressure on spending power and continuing affordability concerns may well dampen buyer demand. There has been recent speculation on the possibility of a rise in the Bank of England base rate. We do not anticipate this will have a significant effect on transaction volumes.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: "Once again, the market has proved its resilience and confounded the doom mongers. Not that there is too much to get excited about with these figures which confirm what we have seen at the coalface recently - that prices are holding up reasonably well where vendors are realistic, partly in response to a continuing shortage of stock.
Sadly, we are not seeing the hoped-for autumn bounce but a steady market is more than welcome with so much uncertain economic news."
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: ’The housing market shows no signs of faltering, despite the ongoing Brexit saga and hints from the Bank of England that interest rates will need to rise sooner rather than later. Mortgage rates continue to be competitive although Swap rates have started edging up on the back of all the talk about interest rate hikes.
As the cost of funds rises and one lender raises rates, the domino effect kicks in and others do the same to avoid being inundated with business and to preserve service levels. Some lenders, including Barclays, Halifax, Nationwide and NatWest have all either raised or are about to raise selected, if not all, rates, so borrowers looking for one of the cheapest fixed-rate mortgages may wish to move sooner rather than later to secure one."
Russell Quirk, founder and CEO of eMoov.co.uk, commented: “No signs of an autumnal cold snap where UK house price growth is concerned and, in fact, the UK market seems to be enjoying somewhat of an Indian Summer with the highest quarterly growth rate since February and the highest average house price on record.
It seems more than apparent that the UK market has found its feet and is starting to gain momentum again. This momentum is unlikely to regress despite the ongoing spectacle of Britain leaving the EU. In addition, while an increase in interest rates seems very likely over the coming months, they are already at such a low level that any increase is likely to be marginal and insignificant when it comes to impacting or deterring buyers.
With the ongoing issue of building supply, UK homeowners can be assured the price of their property will remain stable as we head towards 2018.”
Lucy Pendleton, Founder Director of independent estate agents James Pendleton, had this to say: “The back-to-school bounce in September is likely the cause of this substantial rebound in growth.
It is an annual trend which sees a backlog of transactions brokered in the summer months complete in September once everyone comes back from holiday. What that often means is that the prices attached to those transactions reflect where the market was much earlier in the year, when prices were higher.
On the face of it, this rate of annual growth shoots the market right over the head of inflation with a healthy 1.1% gap and means homeowners are no longer living in an investment that is losing money in real terms. You would think this data would instil much more confidence among sellers but actually this seasonal distortion is quite misleading and you could see price growth soften just as quickly in the coming months.
In London, we are currently seeing many more price reductions at bigger discounts compared with last year. A vendor who commits to a significant price reduction one week is selling the next. This will provide some comfort to first-time buyers who are desperate to see prices come back down to Earth rather than take off again, particularly in the capital.”
Alex Gosling, CEO, online estate agents HouseSimple.com, comments: "It would be easy to get carried away by these figures, but let's not forgot prices are still being supported by low supply, low mortgage rates and low unemployment, rather than a sudden rise in buyer demand.
Saying that, we are definitely starting to see more optimisim from buyers and sellers, and confidence in the stability of the housing market. Our research shows that new sellers in September were up a fifth on August.
This could be attributed to low numbers of new properties being marketed over the summer. However, we have seen more new sellers last month than any single month in the past two years, which suggests it's not simply down to the lull in activity over the holiday period.
Buyers and sellers are still concerned about Brexit, but they are possibly more confident that whatever deal is struck, the fallout won't be as bad as first predicted."
