Halifax reports strongest monthly increase since January amid ongoing market challenges
House prices had their largest monthly increase last month since the start of the year, bringing the average property value to a record £299,862, according to mortgage lender Halifax.
The average price of a home in the UK rose by 0.6% in October, an increase of £1,647. The latest Halifax House Price Index also revealed that annual price growth accelerated to 1.9%, up from 1.3% in the previous month.
“Demand from buyers has held up well coming into autumn, despite a degree of uncertainty in the market, with the number of new mortgages being approved recently hitting its highest level so far this year,” said Amanda Bryden (pictured right), head of mortgages at Halifax.
“There is no doubt that affordability remains a challenge for many. Average fixed mortgage rates are currently around 4% and likely to ease down further, but with property prices at record levels, moving home can feel like a stretch.
“Rising costs for everyday essentials are also squeezing disposable incomes, which affects how much people are willing or able to spend on a new property. Even so, while there has been some volatility, the market has proven resilient over recent months, as many buyers opt for smaller deposits and longer terms to help make the numbers work. With house prices rising more slowly than incomes for almost three years now, we expect the trend of gradually improving affordability to continue.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, agreed that affordability is slowing improving, with lenders easing criteria and reducing rates, putting those ready to proceed with their purchases in a stronger position.
“Although the Bank of England held interest rates at yesterday’s meeting, the vote was closer than expected with four of the nine members favouring a rate cut, which bodes well for a further reduction in December,” Harris added.
“Market expectations are for another rate cut before the end of the year, with Nationwide, Santander, Halifax and NatWest, among other lenders, reducing rates in recent days in an effort to drum up business before year end.”
Nathan Emerson, chief executive of industry body Propertymark, meanwhile, noted the positive implications of rising prices for market sentiment. “It suggests that demand remains strong and that recent economic adjustments are beginning to bear fruit,” he said.
“This optimism also arrives at a time when the UK government’s ambition to deliver 1.5 million new homes in England edges closer to becoming law, a potentially transformative milestone for supply. However, with Stamp Duty across England and Northern Ireland becoming a political flashpoint ahead of the Autumn Budget and a flurry of possible housing policy leaks, the drawn-out uncertainty risks unsettling both buyers and sellers.
“Housing is the heartbeat of the UK economy, so policymakers should be focused on delivering stability and reforms that encourage movement, investment, and growth, not hesitation.”
The Halifax report also provided a breakdown of regional performance. Northern Ireland recorded the fastest annual price increase, with average values up 8% over the past year to £219,646. Scotland saw prices rise by 4.4% to £216,051, while in Wales, values increased by 2% to £229,558.
In England, the North East led with a 4.1% annual rise to £180,924. London and the South East experienced small annual declines of 0.3% and 0.1% respectively, though London remains the most expensive region, with an average property price of £542,273.
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