Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said:
“UK house prices increased by 0.9% month-on-month in September, after taking account of seasonal effects, following a 2.0% rise in August. As a result, there was a further pick up in annual house price growth from 3.7% in August to 5.0% in September - the highest level since September 2016.
“Housing market activity has recovered strongly in recent months. Mortgage approvals for house purchase rose from c66,000 in July to almost 85,000 in August - the highest since 2007, well above the monthly average of 66,000 prevailing in 2019.
“The rebound reflects a number of factors. Pent-up demand is coming through, with decisions taken to move before lockdown now progressing. The stamp duty holiday is adding to momentum by bringing purchases forward. Behavioural shifts may also be boosting activity as people reassess their housing needs and preferences as a result of life in lockdown.
Pandemic leading some to put off moving home…
“Our recent market research[1] indicates that, of the people that had been considering a move before the pandemic, 19% have put their plans on hold, with over a quarter (27%) of these citing concerns about the property market (see chart in the attached).
“Younger people were much more likely to have put off plans than older people, which may reflect concerns about employment prospects.
“Indeed, most forecasters expect labour market conditions to weaken significantly in the quarters ahead as tighter restrictions dampen economic activity and the furlough scheme winds down. While the recently announced jobs support scheme will provide some assistance, it is not as comprehensive as the furlough scheme it replaces.
…but the pandemic may be spurring an even greater number of potential home movers into action…
“Interestingly, around 10% of those surveyed in September said they were in the process of moving as a result of the pandemic, with a further 18% considering a move for the same reason. This pattern was evident across the country, especially in London, as shown in the chart in the attached.
“Of those moving or considering a move, around a third (35%) were looking to move to a different area, while nearly 30% were doing so to access a garden or outdoor space more easily (see chart in the attached).
“As you might expect, the majority of people are looking to move to less urban areas, with this trend becoming increasingly evident among older age cohorts, as shown in the chart in the attached.
Annual price growth edges higher in most regions in Q3
“Most UK regions saw a slight pickup in annual price growth in Q3 (July, August & September) compared with Q2 (April, May & June), with prices in all areas higher than a year ago.
“The South West was the strongest performing region, with annual price growth rising from 2.3% to 5.5% (see full table of regional house price data on page 4). For the first time since 2017, house price growth in southern England (London, Outer Metropolitan, Outer South East, East Anglia and South West) exceeded that in northern England (North, North West, Yorkshire & Humberside, East Midlands and West Midlands).
“Annual house price growth in London continued to edge higher, with prices up 4.4% in Q3. Average prices in the capital hit a record high of £480,857 and are now 57% above their 2007 levels (UK prices are 21% higher than their 2007 peak).
“The surrounding Outer Metropolitan region also saw a rise in annual price growth to 5.0%, while the neighbouring Outer South East region saw a 4.8% rise. Northern Ireland was the weakest performing region, with prices up 1.5% year-on-year. Average prices in the province are still 36% below their 2007 peak.
“Scotland was one of the few areas to see a slowing in the annual rate of price growth, to 2% in Q3, compared to 4.0% in Q2. Meanwhile, Wales saw annual growth accelerate to 3.8%, from 1.0% in Q2.”
Please note that these figures are for the three months to September, therefore will show a different UK average price and annual percentage change to our monthly house price statistics.
Regions over the last 12 months
|
Region |
Average Price (Q3 2020) |
Annual % change this quarter |
Annual % change last quarter |
|
South West |
£260,316 |
5.5% |
2.3% |
|
Outer Met |
£376,682 |
5.0% |
1.6% |
|
Outer S East |
£291,404 |
4.8% |
2.1% |
|
Yorks & H’side |
£167,816 |
4.6% |
1.9% |
|
London |
£480,857 |
4.4% |
2.1% |
|
North |
£132,898 |
4.2% |
0.0% |
|
East Midlands |
£194,749 |
4.0% |
1.5% |
|
Wales |
£165,423 |
3.8% |
1.0% |
|
West Midlands |
£200,622 |
3.1% |
0.6% |
|
North West |
£171,675 |
3.0% |
4.8% |
|
East Anglia |
£238,896 |
2.7% |
0.7% |
|
Scotland |
£153,347 |
2.0% |
4.0% |
|
N Ireland |
£146,152 |
1.5% |
0.1% |
|
UK |
£224,337 |
3.5% |
2.0% |
Nations – annual & quarterly price change
|
Nation |
Average Price (Q3 2020) |
Annual % change this quarter |
Quarterly % change* |
|
England |
£264,886 |
4.4% |
2.2% |
|
Wales |
£165,423 |
3.8% |
2.4% |
|
Scotland |
£153,347 |
2.0% |
-1.0% |
|
N Ireland |
£146,152 |
1.5% |
1.4% |
* Seasonally adjusted
