House price growth remains steady despite uncertainty

House prices increased by 0.5% in September, as price growth remained steady, according to the Nationwide House Price Index.

The data shows, on an annual basis, the average house price rose by 2.2%, up from a 2.1% annual growth rate in August.

The average UK house price now stands at £271,005.

Ongoing uncertainties in the global economy

Robert Gardner, Nationwide’s chief economist, said: “The annual pace of UK house price growth was little changed in September at 2.2%, marginally stronger than the 2.1% recorded in August. Prices increased by 0.5% month on month, after taking account of seasonal effects.

“The broad stability in the annual rate of house price growth over the past three months mirrors that of activity. The number of mortgages approved for house purchase have been hovering at around 65,000 cases per month, close to the pre-pandemic average (despite the higher interest rate environment).

“Despite ongoing uncertainties in the global economy, underlying conditions for potential home buyers in the UK remain supportive.

“Unemployment is low, earnings are rising at a healthy pace, household balance sheets are strong and borrowing costs are likely to moderate a little further if Bank Rate is lowered in the coming quarters as we, and most other analysts, expect.”

England saw a further slowing in annual house price growth

According to the data, Northern Ireland remained the strongest performer by a wide margin, with annual house price growth of 9.6% in Q3.

Wales saw a slight increase in annual house price growth to 3.0% (up from 2.6% in Q2), while growth in Scotland slowed to 2.9% (compared with 4.5% last quarter).

England saw a further slowing in annual house price growth to 1.6%, from 2.5% in Q2. Average prices in Northern England (comprising North, North West, Yorkshire & The Humber, East Midlands and West Midlands) were up 3.4% year on year, with the North (which incorporates areas, such as Tyneside, Teesside and Cumbria) the top performing region in England, with prices up 5.1% year on year.

Meanwhile average house price growth in Southern England (South West, Outer South East, Outer Metropolitan, London and East Anglia) slowed to 0.7%.

Providing the broader economic recovery is maintained, housing market activity is likely to strengthen gradually in the quarters ahead.

Industry reaction to house price index

Guy Gittins, CEO of Foxtons, said: “UK house prices have continued to edge higher on both a monthly and annual basis, further demonstrating the resilience and consistency of the market, which has been the theme for much of 2025.

“Progress during the traditionally quieter summer months has been steady and, with the added stability of another base rate hold, the outlook for the remainder of the year remains positive, despite some uncertainty surrounding the upcoming budget.

“Sellers looking to complete their sale before Christmas need to be entering the market now with the right agent and an added sense of urgency.”

Nathan Emerson, CEO at Propertymark, said: “A sustained upward trend in house prices reflects a resilient and increasingly competitive housing market. This increase can be attributed to several key factors, including limited housing supply, strong buyer demand, and favourable lending conditions that continue to support purchasing activity despite broader economic uncertainties.

“On a macroeconomic level, the increase in prices is consistent with the ongoing imbalance between supply and demand. Construction activity in many regions has not kept pace with population growth and urban migration, exacerbating shortages, particularly in metropolitan areas. This supply constraint has intensified competition among buyers, placing upward pressure on prices.

“Additionally, while interest rates have seen moderate adjustments, they remain at their lowest since mid-2023, which continues to incentivise borrowing. Many prospective homeowners and investors are capitalising on this environment, further fuelling demand.

“While rising house prices reflect confidence in the housing sector, they also present challenges that require coordinated responses to maintain affordability and inclusivity across the market.”