UK house prices are on the up again! They’ve risen for the third month in a row, with the average price now just shy of the all-time high. But what does this mean for you if you’re thinking of buying or selling?
Prices Edge Upwards
The average price of a UK home went up by 0.3% in September, according to Halifax, one of the UK’s biggest mortgage lenders. That might not seem like much, but it adds up to an extra £859 on the price tag, bringing the average house price to £293,399.
This increase follows a similar rise in August and means prices are now just a whisker away from the record high of £293,507 set in June 2022.
Looking back over the past year, prices have jumped up by 4.7%, the fastest rate of growth we’ve seen since late 2022.
Why Are Prices Rising?
Several factors are contributing to this upward trend. One of the biggest is the Bank of England’s recent decision to cut interest rates. This move has sparked a mortgage price war among lenders, making it cheaper for some people to borrow money for a mortgage.
We’re also seeing some lenders, like Nationwide, making it easier for first-time buyers to get on the property ladder. They’re doing this by increasing the amount people can borrow, sometimes up to six times their salary.
Good News for Sellers, Challenges for Buyers
Amanda Bryden, a mortgage expert at Halifax, says that the combination of rising wages and falling interest rates has made mortgages more affordable, giving potential buyers a boost of confidence. In fact, the number of agreed mortgages has shot up by over 40% in the last year.
However, she warns that this doesn’t mean everyone can afford to buy. Many people are still struggling with the high cost of housing, and prices are expected to remain fairly stable into 2025.
Generational Divide in Mortgage Payments
Recent research by Hamptons estate agents highlights the challenges faced by young people trying to buy their first home. They found that Generation Z (those born in the late 1990s) are looking at average monthly mortgage payments of around £1,739.
That’s almost double what millennials (born between the 1980s and early 1990s) are paying, and significantly more than previous generations. This difference is down to years of house price rises and the current interest rate environment.
What Does This Mean For You?
If you’re thinking of selling your home, now could be a good time to take advantage of rising prices. But for buyers, it’s still a tough market. Even with falling interest rates, affordability remains a major obstacle for many.