LONDON (Reuters) -British house prices rose by a higher-than-expected 0.7% in September from August, with the annual growth rate hitting 3.2%, the fastest pace since November 2022, figures from Nationwide Building Society showed on Monday.

Economists polled by Reuters had forecast prices would rise by 0.2% on a monthly basis and stand 2.7% higher than in September 2023.

Robert Gardner, Nationwide's chief economist, said prices had risen after borrowing costs edged lower on expectations that the Bank of England would continue to cut interest rates in the coming quarters.

"These trends have helped to improve affordability for prospective buyers and underpinned a modest increase in activity and house prices, though both remain subdued by historic standards," he said.

(Reporting by Kate Holton; editing by Sarah Young)