Annual house price growth was steady across most of the UK in September

Annual house price growth in the UK was steady in September, up 2% and up 0.3% month on month to an average of £214,922, the latest lender index shows.

The North of England was the weakest performing region in the third quarter of the year, with prices down by 1.7% year on year, according to the data from the Nationwide index.

England was the weakest performing nation in the UK with prices up 1.4% year on year, while in London prices fell by 0.7%, the fifth quarterly fall in a row and prices were also down by 0.3% in the Outer Metropolitan region.

Indeed, prices in the capital are only 3% below the all-time bottom recorded in the first quarter of 2017 and are still more than 50% above their 2007 levels, the figures also show.

Yorkshire and Humberside was the strongest performing region in England, and also the UK, with prices up 5.8% year on year and prices were up 4.8% in the East Midlands and up 4.3% in Northern Ireland.

Wales recorded a slight softening in growth, with prices up 3.3% year on year. Price growth also slowed in Scotland, from 3.1% in the second quarter to 2.1% in the third quarter.

‘Annual house price growth was stable in September and has been confined to a fairly narrow range of 2% to 3% over the past 12 months, suggesting little change in the balance between demand and supply in the market,’ said Robert Gardner, Nationwide’s chief economist.

‘Looking further ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates. Subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year,’ he pointed out.

‘However, borrowing costs are likely to remain low and overall, we continue to expect house prices to rise by around 1% over the course of 2018,’ he added.

Modest house price growth is good news for many buyers, according to Kevin Roberts, director of the Legal & General Mortgage Club. ‘But for those looking to step onto the property ladder in London and the South East, the prospect of home ownership remains a distant reality,’ he pointed out.

He believes that more can be done to help buyers, and that means thinking outside of the box as just building more affordable homes is not just the solution. ‘Building on green belt land or relaxing planning regulations, for example, would help. With the Autumn Budget fast approaching, we hope to see the Chancellor commit to genuine change and reform, if the Government is to remain true to its housing pledge,’ he added.

Ishaan Malhi, chief executive officer of Trussle, explained that first time buyers in major UK cities now need an average income of at least £53,000 to get on the property ladder, an 18% increase in the last three years.

‘The Government and the industry need to work together to make home ownership more accessible by prioritising innovative new solutions and mortgage propositions that will help young adults step foot on the housing ladder,’ he said.

Craig McKinlay, new business director of Kensington Mortgages, is also hoping that the Chancellor will address the difficulties of first time buyers in the Budget and also the situation of older home owners.

‘Fluctuations across the country are balancing out the overall shape of the market, yet many first time buyers are still having to play catch up when attempting to step onto the property ladder. On the other end of the spectrum, the cost of stamp duty for last time buyers is preventing those further down the ladder moving into suitable properties. Add both of these problems to the lack of new supply and prices will only continue one way,’ he said.

‘The Chancellor has the perfect opportunity to introduce new legislation and combat our country’s long term housing issues. In the meantime, however, those who are worried about affordability or how their own circumstances may limit their chances, getting in touch with a financial adviser is a good place to start,’ he added.