September saw the greatest annual growth in UK home prices in two years, indicating the influence of declining mortgage rates on the real estate market.

According to figures from Nationwide, house prices have increased by 0.7% since last month and 3.2% since last year. This is a rise from the sharpest pace of growth since November 2022, which was 2.4% annually in August.

With an average price of £266,094, houses are currently 2% less than their peak in the summer of 2022.

Income growth has been outpacing price growth in recent months, and banks and other building societies have lowered borrowing costs in anticipation of further rate cuts from the Bank of England following the first one in August, according to Robert Gardner, chief economist at Nationwide.

According to data from the Building Society, annual growth in house prices picked up in most UK regions, with Northern Ireland leading the way with an 8.6% increase, Scotland growing at a faster rate in the third quarter (to 4.3% from 1.4% in the second), and Wales seeing a 2.5% increase in prices from 1.4% in the previous quarter.

In the last quarter, the price of a property in England increased by 1.9% when compared to 2023. Northern England continued to do better than Southern England, with prices rising by 3.1% as opposed to 1.3%.

The best-performing southern area was London, where prices increased by 2.0% annually. Only East Anglia in the United Kingdom had an annual decrease in prices, with a 0.8% year-over-year decline.

(Sources: investing.com, proactiveinvestors.co.uk)