UK house prices push higher for first time since 2022

House prices have risen across the UK for the first time in two years, a closely-watched survey showed on Thursday, as the market was buoyed by lower interest rates.

According to the latest residential market survey from the Royal Institution of Chartered Surveyors, the house prices net balance reached 16 on a national basis in September. The first positive result since October 2022, it was also a notable improvement on August’s downwardly-revised 0.

A net balance is the proportion of respondents reporting a rise in prices minus those reporting a fall.

Alongside the rise in prices, buyer demand was largely unchanged, with the balance dipping one point to 14. But new listings sparked from 9 in August to 22.

Respondents also remained positive looking forward, with a net balance of 23 expecting the sales market to grow over the next three months.

Longer term, sentiment was even stronger, with the 12-month outlook balance reaching 45.

RICS said there was a "greater level of positivity" in the market, which it attributed to both the recent cut in interest rates and the expectation of more to come.

The Bank of England trimmed the cost of borrowing by 25 basis points to 5% in August, the first reduction in four years. The Monetary Policy Committee then left rates unchanged in September, but it is widely expected to trim again it next meets in November.

Tarrant Parson, head of market analytics at RICS, said: "The latest survey results convey a brighter picture for housing market activity.

"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."

Kathleen Brooks, research director at XTB, said: "This is another sign that the UK housing market is picking up as interest rates are falling.

"However, the detail is interesting. The survey has reported an uptrend in housing in the last few months; however, in September, some sub-indices moderated, including sales expectations, price expectations and new buyer enquiries

"The pullback in the sub-indices could be a sign that UK consumers are holding back on big ticket purchases like houses until after the budget."

Tina Paillet, RICS president, said: "As we approach the 100-day mark of the new government, it is encouraging to see housing prioritised so strongly. The government has moved quickly to outline ambitious planning reforms and set housing targets aimed at increasing supply.

"Now it is crucial for developers and investors to feel confident that these forms will now create planning, skills and resources bottlenecks."

Chancellor Rachel Reeves is due to announce her budget on 30 October.