"Providing the broader economic recovery is maintained, housing market activity is likely to strengthen gradually in the quarters ahead"
- Robert Gardner - Nationwide
Annual UK house price growth held at 2.2% in September, compared with 2.1% in August. Average prices increased to £271,995 in September from £271,079 the previous month, according to this morning's report from Nationwide.
Robert Gardner, Nationwide’s chief economist, commented: “The annual pace of UK house price growth was little changed in September at 2.2%, marginally stronger than the 2.1% recorded in August. Prices increased by 0.5% month on month, after taking account of seasonal effects.
“The broad stability in the annual rate of house price growth over the past three months mirrors that of activity. The number of mortgages approved for house purchase has been hovering at around 65,000 cases per month, close to the pre-pandemic average (despite the higher interest rate environment).
“Despite ongoing uncertainties in the global economy, underlying conditions for potential home buyers in the UK remain supportive.
“Unemployment is low, earnings are rising at a healthy pace, household balance sheets are strong, and borrowing costs are likely to moderate a little further if Bank Rate is lowered in the coming quarters as we, and most other analysts, expect.
“Providing the broader economic recovery is maintained, housing market activity is likely to strengthen gradually in the quarters ahead.”
Regional variations in Q3 2025
Nationwide’s regional data showed that most areas experienced a modest slowdown in house price growth in Q3.
Northern Ireland led the market with an annual growth of 9.6%, echoing trends seen in the border regions of Ireland.
Wales recorded growth of 3.0%, slightly higher than the 2.6% seen in Q2.
Scotland slowed to 2.9%, compared with 4.5% in the previous quarter.
England registered a further slowdown, with growth falling to 1.6% from 2.5% in Q2. Within this, northern regions outperformed the south. Average prices in northern England, covering the North, North West, Yorkshire & The Humber, East Midlands, and West Midlands, rose 3.4% year on year. The North, including Tyneside, Teesside, and Cumbria, was the best-performing area in England, with growth of 5.1%.
By contrast, southern England saw a marked cooling, with average price growth falling to 0.7%. This was driven by weakness in the outer metropolitan area and the outer South East. The latter was the weakest performing region overall, posting growth of just 0.3%, down from 2.6% in Q2.
Property types
The data also highlighted differences in performance between property types.
Semi-detached homes recorded the largest annual rise at 3.4%.
Detached and terraced houses both saw increases of 2.5% and 2.4% respectively.
Flats declined slightly by 0.3% year on year.
Gardner explained: “Our most recent data by property type shows that semi-detached properties have seen the biggest percentage rise in prices over the last 12 months, with average prices up 3.4% year on year.
“Detached and terraced properties saw similar growth, at 2.5% and 2.4% respectively. However, flats saw a small year-on-year decline of 0.3%. Looking over the longer term, flats have seen noticeably weaker growth than other property types in recent years. For example, over the last 10 years, the price of a typical flat has increased by around 20%, less than half of the rise in the price of terraced houses over the same period."
Industry reactions
Tom Bill, head of UK residential research at Knight Frank, comments, “High levels of supply and a growing sense of uncertainty as November’s Budget approaches are both keeping downwards pressure on demand and prices. Stable mortgage rates so far this year have encouraged buyers to act, but a repeat of last year’s game of ‘guess the tax rise’ ahead of the Budget means hesitancy will rise over the next two months, which prompted us to recently downgrade our 2025 UK forecast to 1% from 3.5%. As it increasingly becomes a buyer’s market, sellers will need to be realistic with asking prices to get buyers through the door for a viewing.”
Nathan Emerson, CEO at Propertymark, said, “A sustained upward trend in house prices reflects a resilient and increasingly competitive housing market. This increase can be attributed to several key factors, including limited housing supply, strong buyer demand, and favourable lending conditions that continue to support purchasing activity despite broader economic uncertainties.
“On a macroeconomic level, the increase in prices is consistent with the ongoing imbalance between supply and demand. Construction activity in many regions has not kept pace with population growth and urban migration, exacerbating shortages, particularly in metropolitan areas. This supply constraint has intensified competition among buyers, placing upward pressure on prices.
“Additionally, while interest rates have seen moderate adjustments, they remain at their lowest since mid-2023, which continues to incentivise borrowing. Many prospective homeowners and investors are capitalising on this environment, further fuelling demand.
“While rising house prices reflect confidence in the housing sector, they also present challenges that require coordinated responses to maintain affordability and inclusivity across the market.”
Guy Gittins, CEO of Foxtons, commented, “UK house prices have continued to edge higher on both a monthly and annual basis, further demonstrating the resilience and consistency of the market, which has been the theme for much of 2025.
"Progress during the traditionally quieter summer months has been steady and, with the added stability of another base rate hold, the outlook for the remainder of the year remains positive, despite some uncertainty surrounding the upcoming budget.
"Sellers looking to complete their sale before Christmas need to be entering the market now with the right agent and an added sense of urgency.”
Verona Frankish, CEO of Yopa, noted, “Whilst we’re not seeing fireworks in terms of house price performance as we head into October, the overarching air of stability that has materialised in recent months suggests that market activity remains robust.
"We’re now entering a traditionally busy time of year, and the expectation is that this momentum will only build.
"That said, those hoping for Father Christmas to deliver a completed sale by December 25th need to act now, whether that means listing their property for sale or getting their finances in order to purchase. The window to move before Christmas is now open, but it won’t stay that way for long.”
Marc von Grundherr, Director of Benham and Reeves, commented, “Another month of steady growth demonstrates the remarkable consistency of the UK property market.
"London, of course, remains the outlier and growth has been slower across the capital. However, even the most modest gains equate to thousands of pounds in real terms, given the capital’s higher values.
"The message is clear: this is a market that refuses to stand still. While growth may not be headline-grabbing, it is sustainable, it is reliable, and it is happening in spite of seasonal distractions, interest rate speculation and political noise."
