The average price of a residential property in the UK edged up to hit a record high in October, the latest figures from Halifax show.
A typical property now costs £293,999, surpassing a previous peak set in June 2022 of £293,507.
House prices increased by an average of 0.2% month-on-month, a slower pace than in the previous months, but a fourth consecutive monthly rise, the data showed.
Amanda Bryden, head of mortgages at Halifax, said: “That house prices have reached these heights again in the current economic climate may come as a surprise to many.”
She explained that market activity had been improving on the back of the average mortgage rates dropping steadily since the spring, coupled with continued income growth.
House prices were up 3.9% from October last year, which marks a slowdown from the 4.6% increase registered in September. The figure was also lower than the 4.1% rise expected by economists polled by LSEG.
Last week, Nationwide also reported slower house price growth in October.
Industry reaction:
Guy Gittins, CEO of Foxtons, said: “A fourth consecutive month of positive growth demonstrates the current strength of the UK property market and now that the dust has settled on last week’s Autumn Budget, the outlook continues to be very positive.
“While homebuyers were understandably disappointed about the lack of a stamp duty relief extension last week, the vast majority have already factored this increased cost into their plans for 2025 and those currently looking to purchase still have time to complete before the deadline at the end of March next year.
“As a result, we can expect the heightened level of market activity seen this year to continue, with momentum strengthening as we head into 2025, further elevated by forecast interest rate reductions, the first of which could be seen as soon as today.”
Marc von Grundherr, director of Benham and Reeves, commented: “A degree of property market hesitation is always to be expected in the run up to a major economic event such as the Autumn Budget. Despite this, house prices have continued to climb, albeit at a slower rate, but this demonstrates the intent that is currently being shown on both the side of buyers and sellers in the current market.”
Verona Frankish, CEO of Yopa, remarked: “Although the market may have taken a brief pause for breath ahead of the Autumn Budget, we expect to see activity increase considerably between now and the end of March next year, as homebuyers look to make their move before stamp duty relief reverts back to previous thresholds.
“This means we’re in for a very strong end to 2024 and we can expect an accelerated rate of house price growth to materialise over the coming months as a result.”
Nathan Emerson, CEO of Propertymark, commented: “Following the recent Budget there is potential the housing market may see an increased momentum across the winter months, as buyers potentially look to make their move ahead of proposed Stamp Duty increases from 1 April 2025. Increases will impact buyers across England and Northern Ireland, with some seeing Stamp Duty costs typically increase by around £2,500. However, it remains important to view the wider picture and that continued house price growth, even in the short to medium term, will help offset such tax expenditures for the highest percentage of those looking to purchase after the threshold change date.”
Tom Bill, head of UK residential research at Knight Frank, said: “The interest rate landscape has become more adverse than a fortnight ago, which will increase downwards pressure on house prices in the short-term. The Budget signalled higher levels of public borrowing and swap rates have jumped since the start of last month. The impact of a Trump presidency on UK interest rates is harder to predict. While the new President’s economic plans may prove inflationary, the UK’s appeal among investors could grow, potentially putting downwards pressure on rates in the longer term. For now, anyone deciding whether to fix for two or five years must consider whether they think Labour’s revenue-raising plans will work or more rate turbulence lies ahead during this Parliament”
Nicky Stevenson, MD at Fine & Country, added: “October’s rise in house prices fuels optimism for a strong finish to 2024 in the property market.
“Despite recent uncertainties caused by the Budget, the housing market has held strong, bolstered by encouraging economic indicators.
“Investors still anticipate an interest rate cut at today’s Bank of England meeting — which could provide further momentum. Experts also predict that inflation will hover near the government’s 2% target until 2029.
“The full impact of the Autumn Budget on long-term interest rates may take time to unfold, but a rate cut in November would likely boost consumer confidence.
“In the meantime, market activity has continued to gain traction, with mortgage approvals rising for the fourth consecutive month in September to reach their highest levels since August 2022.
“We are currently in a buyer’s market, with housing supply at its highest point since 2014 and a 12% increase in available properties year-on-year. This expanded inventory, alongside affordability concerns, means sellers must stay competitive, as offers generally fall below asking prices.
“Following last week’s Autumn Budget, the market outlook remains broadly optimistic, despite adjustments like the increased stamp duty surcharge on second homes and buy-to-let properties, which rose from 3% to 5%.
“However, the government’s £5bn commitment to housing development underscores a long-term vision for a healthier market, likely supporting steady growth as we move forward.”