House prices have increased by 4.7% year-on-year, the strongest rate since November 2022, Halifax has revealed.

The firm’s house price index found that the average property price in September stood at £293,399, which is the highest price since June 2022.

Halifax said that the higher annual growth continues to reflect the base impact of weaker prices a year ago.

Head of mortgages at Halifax, Amanda Bryden, said: "UK house prices climbed for the third month in a row in September, with a slight increase of 0.3%, or £859 in cash terms. Annual growth edged up to 4.7%, the highest rate since November 2022. This brings the average property price up to £293,399, just shy of the record high of £293,507 set in June 2022.

"It’s essential to view these recent gains in context. While the typical property value has risen by around £13,000 over the past year, this increase is largely a recovery of the ground lost over the previous 12 months. Looking back two years, prices have increased by just 0.4% (£1,202).

"Market conditions have steadily improved over the summer and into early autumn. Mortgage affordability has been easing thanks to strong wage growth and falling interest rates. This has boosted confidence among potential buyers, with the number of mortgages agreed up over 40% in the last year and now at their highest level since July 2022."

In terms of nations and regions in the UK, Northern Ireland was the best performer, with prices increasing by 9.7% annually. The average price stood at £232,769, which is the highest level since May.

House prices in Wales and Scotland increased by 4.4% and 2.1% respectively over the past year, with the average price standing at £225,119 in Wales and £205,718 in Scotland in September.

The North West was the strongest performing region in England, with prices jumping by 5.1% annually to £234,355.

London was still the most expensive region to purchase a property in the UK, averaging at £529,238.

This was an increase of 2.6% year-on-year, although it is still some way below the capital’s peak property price of £552,592 set in August 2022.

Personal finance analyst at Bestinvest, Alice Haine, added that the housing market is expected to "continue strengthening line with affordability levels".

Haine stated: "Bank of England (BoE) Governor Andrew Bailey raised hopes of better borrowing conditions last week when he suggested the central bank may get ‘aggressive’ on interest rates cuts provided inflation remains under control. This raises the likelihood that the BoE will push ahead with a second rate cut at its next monetary policy meeting at the start of November and the possibility of a consecutive reduction in December.

"For now, optimism is back with the housing market in better health than a year ago when mortgage rates were still alarmingly high. Lenders are continuing to trim their home loan costs, with more sub-4% deals available on both two-and-five-year fixes and a raft of cuts targeting first-time buyers, so those shopping around for a new deal are likely to be feeling more optimistic."

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