Resilience of the market is 'remarkable'

UK house price growth held steady in September, with Nationwide reporting an annual increase of 2.2%, slightly higher than the 2.1% rise seen in August. 

The average house price now stands at £271,995, according to the building society’s monthly index. On a seasonally adjusted basis, prices rose 0.5% over the month, reversing the 0.1% decline recorded in August. 

“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,” Robert Gardner, Nationwide’s chief economist, said. 

Gardner noted that price stability reflects the broader housing market. “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),” he said. 

He added that conditions remain supportive for buyers despite wider economic uncertainty. “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 the Bank Rate is lowered in the coming quarters as we, and most other analysts, expect. Providing the broader economic recovery is maintained, housing market activity is likely to strengthen gradually in the quarters ahead.” 

Jason Tebb, president of OnTheMarket, said that the “resilience of the market is remarkable.” 

He added: “Five interest rate cuts since August 2004 have helped boost affordability, confidence and momentum. Even though September’s meeting of the Bank of England resulted in a hold rather than a further cut in rates, that stability enables buyers and sellers to plan ahead with some confidence.” 

Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, added that while the summer market’s robustness was surprising, many people are now waiting for what the Budget may bring. 

“That said, well-priced property continues to sell, and the gap between serious buyers and committed sellers has narrowed,” she said. “Stock levels remain constrained in some areas, keeping competition strong for the best homes. In my view, if you have the money and can afford and want to move now, then it is a good time to proceed when you are less likely to be competing for a property and subject to sealed bids." 

Modest slowdown in house price growth 

Nationwide’s quarterly figures showed that most UK regions experienced a modest slowdown in price growth in the third quarter of 2025. Northern Ireland remained the strongest performer, with annual growth of 9.6%. Wales recorded a slight increase to 3%, while Scotland saw growth ease to 2.9% from 4.5% in the previous quarter. 

England posted a further slowdown, with annual growth of 1.6%, compared with 2.5% in the second quarter. Within England, northern regions outperformed, with average prices up 3.4% year on year. The North, covering areas including Tyneside, Teesside, and Cumbria, recorded the highest growth in England at 5.1%. 

In contrast, southern regions lagged behind, with growth slowing to 0.7%. The Outer South East was the weakest area, with prices rising just 0.3% year on year, down from 2.6% in the previous quarter. London saw growth of 0.6%, leaving the capital the most expensive region with an average house price of £527,694. 

Source: Nationwide 

Semi-detached properties record the strongest gains 

By property type, semi-detached homes saw the strongest gains, rising 3.4% annually. Detached and terraced houses recorded increases of 2.5% and 2.4%, respectively. Flats were the only category to register a decline, slipping 0.3%. Over the past decade, flats have seen significantly weaker growth than other property types, with values rising by about 20%, less than half the increase in terraced homes. 

Lenders step up with new products  

This resilience will be welcomes by lenders, which have been competing hard to attract first-time buyers. David Titherington, of The Mortgage Station, pointed to a string of initiatives this year: “The Leeds Building Society and Accord have increased income multiples to help first-time buyers onto the ladder,” he said, noting that Leeds had gone further by allowing couples to qualify even if only one of them was a first-time buyer.  

Skipton’s delayed start mortgage, giving borrowers three months without repayments to ease moving costs, and Virgin Money’s Retrofit Boost cashback for energy-efficiency upgrades, are further examples of innovation. “The market across the board does feel so much more positive with lots of innovative products being released,” Titherington said, highlighting renewed activity in the 95 per cent loan-to-value space for new builds and sharper remortgage competition.  

Regulation opens the door to cautious change  

Craig Head of Mortgage Required said the regulatory environment was key to these shifts. “The most significant movement has come from the easing in regulation from the Bank of England and PRA in freeing up lenders to increase Loan to Income levels,” he said. Smaller and regional lenders, he noted, had responded by loosening stress tests and experimenting with more flexible underwriting.  

But lenders remain tentative. “Those smaller lenders are inching toward more flexibility, especially in their rate pricing and marginal underwriting tweaks, but the changes are still really cautious. The significant shift will likely come later once the regulatory changes stabilise and lenders feel more and more confident with the adjustments and their impact.”  

For now, the mortgage industry is balancing modest growth with fresh competition. Product innovation and regulatory easing are reshaping the market, but much depends on the budget and the Bank of England’s next move. The coming months will reveal whether this autumn’s calm is the start of a stronger recovery, or simply a pause before the next challenge.