House prices continued to push higher in September, industry data showed on Monday, despite the cost-of-living crisis and interest rates at 14-year highs.
According to the latest Rightmove House Price Index, the average asking price of a property coming to market was £367,760 in September, up 0.7% on August and 8.7% year-on-year.
The increase was largely in line with the average September rise of 0.6% seen over the last 10 years.
The Bank of England last week upped interest rates for the seventh consecutive time, leaving the cost of borrowing at its highest since 2008. According to Rightmove, the average monthly mortgage payment for first-time buyers putting down a 10% deposit has now reached £1,057 per month, or 40% of an average gross salary, for the first time since November 2012.
Inflation also remains at near-40 year highs at 9.9%.
But Tim Bannister, director of property science at Rightmove, said: “The end of the summer break and the start of the new school term is usually a time when we see renewed focus from buyers, as those with plans to move see an autumn window of opportunity ahead.
“Price growth this month in the middle and high-end sectors highlights that even when finances are more stretched, many of the reason for looking to move up the ladder remain.”
Rightmove said buyer demand was now ahead 20% on the pre-pandemic, five-year average. The market has been hit by low levels of new stock coming to market, although the property portal noted that the number of homes coming to market had strengthened to 2019 levels.
Bannister noted: “Prices are likely to remain strong while demand continues to outweigh supply.
“The housing market continues to be extremely resilient even in the face of the economic headwinds that are stretching house finances.”
On Friday, chancellor Kwasi Kwarteng announced permanent changes to stamp duty, including raising the threshold to £250,000 from £125,000.
Bannister said: “Demand has been softening over the last few months, but Friday’s announcement is likely to stimulate some more demand. If it does lead to a big jump in prospective buyers competing for the constrained number of properties for sale, then it could lead to some unseasonal price rises over the next few months.”