UK house price growth outpaces forecasts as North surges, London lags

UK location prices climbed faster than forecast successful September, underscoring nan market’s resilience but besides stoking caller worries astir affordability, widening location divides and raising questions complete really agelong first-time buyers tin support up pinch prices.

"The connection is clear: this is simply a marketplace that refuses to guidelines still. While maturation whitethorn not beryllium headline-grabbing, it is sustainable, it is reliable, and it is happening successful spite of seasonal distractions, liking complaint speculation and governmental noise," said Marc von Grundherr, head of Benham and Reeves.

The Nationwide UK Housing Index showed a 0.5% monthly emergence successful September, much than double economists’ forecasts. Annual maturation edged up to 2.2%, supported by debased unemployment and expectations of liking complaint cuts, factors that raise request for housing.

"London, of course, remains nan outlier and maturation has been slower crossed nan capital. However, moreover nan astir humble gains equate to thousands of pounds successful existent position fixed nan capital’s higher values," von Grundherr continued.

Nationwide puts London’s yearly maturation astatine 0.6% for nan 3rd 4th of 2025.

This indicates that request successful nan lodging marketplace is holding up, pinch much buyers consenting aliases capable to participate contempt affordability pressures. Sellers besides look much assured successful asking for higher prices, suggesting nan marketplace has regained momentum aft a softer summer.

"Progress during nan traditionally quieter summertime months has been dependable and, pinch nan added stableness of different guidelines complaint hold, nan outlook for nan remainder of nan twelvemonth remains positive, contempt immoderate uncertainty surrounding nan upcoming budget," explained Guy Gittins, CEO of Foxtons.

Regional differences successful value hikes

The latest Nationwide Index shows crisp contrasts and an uneven summation successful prices betwixt different regions of nan UK. While nan nationalist image suggests humble growth, astir of nan momentum seems to beryllium concentrated extracurricular nan traditionally priciest areas.

Northern Ireland remains nan clear outlier, signaling a 9.6% yearly summation successful nan 3 months to September — acold supra nan nationalist average. Northern England besides outperformed, pinch maturation of 3.4% year-on-year, and nan North region successful peculiar climbing by 5.1%. The North includes areas for illustration Tyneside, Teesside, and Cumbria.

Wales posted a 3% yearly rise, while Scotland saw a 2.9% gain, somewhat slower than successful nan erstwhile quarter.

By contrast, confederate England is lagging, pinch maturation of conscionable 0.7% complete nan year. Within that, nan Outer South East posted nan weakest consequence astatine 0.3%, and London hardly moved, highlighting nan persistent affordability pressures and tighter purchaser sentiment successful nan capital.

The information indicates that regions pinch little starting aliases opening prices and stronger wide affordability are driving nan nationalist marketplace higher, while wealthier confederate areas are cooling aliases not keeping up pinch nan pace.

Nationwide noted that owe approvals, astatine astir 65,000 a month, are backmost to pre-pandemic norms contempt higher liking rates, suggesting that activity has stabilised moreover if location disparities remain.

By spot type, semi-detached homes saw nan strongest gains, up 3.4% year-on-year, followed by detached astatine 2.5%. Prices for terraced houses grew by 2.4% while flats recorded a mini diminution of 0.3%, continuing a longer-term inclination of underperformance.