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UK house prices almost reached a record high last month, as a result of dropping mortgage rates, according to Halifax, the country’s largest mortgage lender. The average price of a UK house reached £293,399 in September, just short of the record high of £293,507 in June 2022. Prices have risen for the third month in a row, reflecting an improvement in market conditions.
Halifax said, “mortgage affordability has been easing thanks to strong wage growth and falling interest rates.” It also stated that house prices are up 4.7% on the previous year, which is the fastest rate of growth since November 2022. The highest annual house price growth of all nations and regions in the UK is in Northern Ireland.
According to Guy Gittins, chief executive of Foxtons, “The market is recovering. It certainly won’t be the best year we’ve ever seen but each time we see a small interest rate drop, more buyers are returning from that backlog of last year.” Karen Noye, mortgage expert at Quilter, argues that although some lenders currently offer deals at around 4%, the cost of borrowing is still out of reach for many, especially first-time buyers.
Furthermore, while Halifax’s recent cuts in mortgage rates have provided relief for some, housing costs still pose a challenge for many. First-time buyers are buying properties priced at £232,769 on average, the highest price for first-time buyers since May. However, this still falls around £1,000 below the amount they were paying on average two years ago.
Despite these figures, it is possible to mitigate mortgage costs through measures such as overpayments and interest-only mortgages. While standard mortgages have a 25-year term, lenders now offer longer repayment terms
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