The annual house price growth picked up to 5.0% during September, the highest rate since September 2016, according to the latest Nationwide House Price Index.

UK house prices increased by 0.9% month-on-month in September after taking account of seasonal effects, which followed the 2.0% rise that Nationwide reported in August.

Nationwide suggested that housing market activity has “recovered strongly” in recent months, highlighting that mortgage approvals for house purchase had risen from around 66,000 in July to almost 85,000 in August – the highest level since 2007, and well above the monthly average of 66,000 prevailing in 2019.

The latest data also took the average UK house price to £226,129 in September, up from £224,123 in August.

Nationwide chief economist, Robert Gardner, suggested that the market’s rebound “reflects a number of factors”.

“Pent-up demand is coming through, with decisions taken to move before lockdown now progressing,” Gardner said. “The stamp duty holiday is adding to momentum by bringing purchases forward. Behavioural shifts may also be boosting activity as people reassess their housing needs and preferences as a result of life in lockdown.

“Our recent market research indicates that, of the people that had been considering a move before the pandemic, 19% have put their plans on hold, with over a quarter (27%) of these citing concerns about the property market. Younger people were much more likely to have put off plans than older people, which may reflect concerns about employment prospects.

“Most forecasters expect labour market conditions to weaken significantly in the quarters ahead as tighter restrictions dampen economic activity and the furlough scheme winds down. While the recently announced jobs support scheme will provide some assistance, it is not as comprehensive as the furlough scheme it replaces.

Commenting on Nationwide’s latest figures, Trussle head of mortgages, Miles Robinson, suggested that the data had continued to show that the UK housing market is experiencing a “mini-boom”.

“However, it still remains a challenging time for first-time buyers who are continuing to face increased scrutiny from lenders, tighter criteria and a shrinking range of high LTV products,” he said.

“Ninety-two per cent of deals have been pulled from the market since March this year, and as of this week, there are only 74 mortgage deals available for mortgage applicants with a LTV over 90%. By comparison, this time last year there were over 2,000. To put this into context, from September 2019 to September 2020 the number of 90% or higher LTV mortgage products has decreased by 79%.

Enness Global Mortgages group CEO, Islay Robinson, added: “Although the market is sure to run out of puff at some point, it certainly looks as though the traditional meander into Christmas and the New Year will be replaced by a sprint finish, and this could last well into 2021.

“For those considering a property purchase, now remains a great time to do so. Despite house prices rising rapidly, there are still some fantastic mortgage rates available for those who can secure them.”

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