The housing market made further ground in September with house prices rising for the third consecutive month, up by 0.3 percent versus August. Although this represents a substantial annual increase of 4.7 percent and the average property price reaching £293,399, this increase is predominantly due to a rebound from previous losses. Prices have increased by only 0.4 percent over the past two years, indicating more moderate long-term growth.

Buyer confidence has been boosted by the decline in interest rates and robust wage growth. Mortgage agreements have increased by more than 40 percent in the past year, marking the highest figure since July 2022 and reflecting improved affordability. Nevertheless, the market remains burdened by the broader affordability crisis.

The Halifax sees property price growth remaining moderate over coming months due to rising living expenses. The outlook remains cautiously optimistic, with the potential for additional support for purchasers from anticipated further reductions in interest rates. More generally, today's update puts the UK RPI at 28 and the RPI-P at 24, meaning that overall economic activity is essentially moving ahead of market expectations.

Prices are seen up 0.2 percent on the month after a slightly stronger than expected 0.3 percent gain in August.

The Halifax House Price Index (HPI) is the UK's longest running monthly house price measure with data covering the whole country going back to January 1983. The index is based on the largest monthly sample of mortgage data, typically covering around 15,000 house purchases per month, and covers the whole calendar month. In March 2016 Markit announced that it would be acquiring the Halifax HPI from Lloyds Banking Group. Halifax continues to publish the index on behalf of Markit and both the name and the basic methodology remain unchanged. However, in May 2020, the annual growth measure was changed from the average of the last three months to just the latest month.

Home values affect much in the economy - especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can damp housing starts. Changes in home values play key roles in consumer spending and in consumer financial health. During the first half of this decade sharply rising home prices boosted how much home equity households held. In turn, this increased consumers' ability to spend, based on wealth effects and from being able to draw upon expanding home equity lines of credit.