House prices grow for first time in two years as property market gains momentum

Surveyors say UK house prices are climbing for the first time in two years as the market gains momentum.

A positive balance of 16% of observed a price rise in September, rising from a break-even result in August and marking the first upward trend since October 2022. According to the Royal Institution of Chartered Surveyors (Rics), there's been a boost in buyer interest, sales activity, and fresh property listings throughout September.

A net balance of 14% of property professionals saw demand from buyers rise rather than fall in September. Furthermore, an overall balance of 5% saw sales go up rather than down, with 23% expecting more hikes in the following three months, and 45% anticipating higher numbers over the next year.

With new seller listings also on the up, indicated by a balance of 22% noting an increase. The report also noted that speculation over a potential increase in capital gains tax was cited as encouraging some people to list their properties for sale.

Tarrant Parsons, representing the Rics analytics team, said: "The latest survey results once again convey a brighter picture for housing market activity, with the recent easing in mortgage interest rates continuing to support a recovery in buyer demand. Critical for the outlook, a further unwinding in monetary policy is anticipated over the months ahead, which should create a more favourable backdrop for the market moving forward."

READ MORE:

"In keeping with this idea, forward-looking sentiment data from the survey points to sales volumes gaining impetus, both in the near term and over the next 12 months."

In the lettings market, demand continues to outstrip supply, Rics said. Professionals reported the supply of properties shrinking, while tenant demand increased. This trend is further influenced by some landlords listing their properties for sale before potential capital gains tax rises, Rics said.

Rics president Tina Paillet commented: "Rics survey results continue to highlight the pressures on renters, with demand consistently outstripping supply. While the Renters’ Rights Bill aims to improve standards and offer better protections for tenants, we must ensure that these reforms do not discourage responsible landlords from remaining in the market."

Property giant Zoopla reported that the average UK home now demands a price tag of around £300 per square foot. Hartlepool offers the cheapest cost per square foot at just £118, while Kensington and Chelsea in London stand as the priciest at £1,373, according to Zoopla's calculations.

Izabella Lubowiecka, a senior property researcher at Zoopla, advised: "A property that comes with an extra bedroom or bathroom might still not have right amount of additional space the buyer is looking for. Examining the square footage of a property can help buyers to identify if a property has that space and if the cost per square foot is worth it."

Here is the average cost of a home per square foot, according to Zoopla (Northern Ireland was not included by Zoopla in its regional breakdown):

North East, £145

, £175

Wales, £200

North West, £205

Yorkshire and the Humber, £205

East Midlands, £225

West Midlands, £240

South West, £295

East of England, £330

South East, £375