Here's what you need to know about house prices if you're thinking of buying or selling in 2024
Nationwide's data reveal East Anglia was the only region to see house prices go down annually(Image credit: Getty Images)
House prices experienced their fastest annual growth in two years, rising by 3.2% year-on-year in September, according to Nationwide.
House prices are now just 2% off the record prices seen in the summer of 2022 with the North West and Northern Ireland seeing the highest annual and quarterly rises.
House prices show 'resilience' in the face of 'higher interest rate environment'
A graph showing the annual and quarterly house price growth and decline in Q3 of 2024.(Image credit: Nationwide)
Nationwide's latest figures show a 0.7% monthly increase in September, bringing the average house price to £266,094, up from £265,375 in August.
Northern Ireland led regional growth with an 8.6% increase in prices during Q3, while East Anglia was the weakest performer, with prices falling by 0.8% over the year.
Nationwide's Chief Economist, Robert Gardner, said: “Income growth has continued to outstrip house price growth in recent months while borrowing costs have edged lower, helping to improve affordability for prospective buyers.”
He added that these factors have supported a modest rise in both activity and house prices, although both remain subdued compared to historic levels.
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Robert Gardner
Robert Gardner serves as the Chief Economist at Nationwide, where he heads a team dedicated to offering economic analysis and guidance, with a specific focus on the UK economy and a strong emphasis on monitoring the housing market and house prices.
Energy efficiency becomes more important in determining house prices
Nationwide also revealed that as energy efficiency becomes a crucial factor for homebuyers, properties with higher energy performance ratings are commanding noticeable price premiums.
Homes rated A or B for energy efficiency are now selling for 2.8% more than similar properties with a D rating, while those with the lowest ratings (F or G) are valued 4.2% lower.
This shift reflects a growing awareness among buyers about the long-term savings and environmental benefits of energy-efficient homes. With nearly half of the UK’s housing stock now rated C or above, there's progress, but the journey to meet the government’s 2035 targets for energy efficiency is slow.
The cost to upgrade all homes to at least a C rating is estimated at up to £94 billion, highlighting the scale of the challenge.
'Further incentives' needed to help decarbonise homes
As the market evolves, homebuilders and buyers alike are increasingly focused on sustainability, signalling that energy efficiency will be a key driver in future home values.
Robert Gardner highlights that energy efficiency in UK homes has improved significantly over the past decade, with 48% of housing stock now rated C or higher, compared to just 18% in 2012.
He notes that while newly built homes typically have higher energy ratings, the pace of improvement has slowed in recent years.
Gardner points out that "the current pace of energy efficiency improvements is relatively slow," and emphasises "further incentives to help decarbonise homes” are needed to meet the government's goal of upgrading as many homes as possible to band C by 2035.
The average cost to improve a home to a C rating is around £7,400, with a total estimated cost of up to £94 billion for the entire housing stock.
House prices could affect those looking to buy and sell in 2024(Image credit: Getty Images)
Mortgages see three consecutive months of growth
The latest Bank of England statistics show that mortgage approvals for house purchases rose by 3.8% in August, reaching 64,858, up from 62,496 in July.
This marks three consecutive months of growth, despite with mortgage rate rises, with approvals 43.4% higher than the 45,219 seen in August 2023. Optimism remains high for further increases, especially if a bank rate cut occurs in November.
Jonathan Samuels, CEO of Octane Capital, noted that "buyers are returning to the market at mass" despite mortgage rate reductions not fully reflecting the recent base rate cut. He added, "it’s only a matter of time before we see further rate reductions".
News Editor Joseph has previously written for Today’s Media and Chambers & Partners, focusing on news for conveyancers and industry professionals. Joseph has just started his own self build project, building his own home on his family’s farm with planning permission for a timber frame, three-bedroom house in a one-acre field. The foundation work has already begun and he hopes to have the home built in the next year. Prior to this he renovated his family's home as well as doing several DIY projects, including installing a shower, building sheds, and livestock fences and shelters for the farm’s animals. Outside of homebuilding, Joseph loves rugby and has written for Rugby World, the world’s largest rugby magazine.
