"With house prices rising more slowly than incomes for almost three years now, we expect the trend of gradually improving affordability to continue"
- Amanda Bryden - Halifax
UK house prices rose by +0.6% in October, marking the biggest monthly increase since January, compared with a -0.3% fall in September. It was the fourth time in five months that the average property value had increased, taking the typical price to £299,862, a new record high. The annual rate of growth also accelerated to +1.9%, up from +1.3% in September.
Mortgage approvals climbed to their highest level this year, suggesting continued resilience in buyer demand.
Regional trends
Northern Ireland continues to lead the UK’s annual house price growth, with average values up +8.0% over the past year, compared with +6.4% the previous month. The typical home there now costs £219,646.
In Scotland, annual price growth reached +4.4% in October, bringing the average property value to £216,051. In Wales, prices rose +2.0% year-on-year to £229,558.
In England, the North East recorded the highest annual growth rate, with property prices increasing by +4.1% to £180,924.
London and the South East both saw small annual declines in October, down -0.3% and -0.1% respectively. Despite the slight fall, London remains the most expensive region, with the average property now valued at £542,273.
Market insights
“October saw the biggest monthly rise in UK house prices since January this year, with the value of the average UK home increasing by +0.6% (£1,647),” said Amanda Bryden, head of mortgages at Halifax. “That brings the typical property price up to £299,862, the highest on record, while annual growth also increased to +1.9% (from +1.3%)."
“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,” Bryden explained. “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."
Bryden concluded, “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,” she noted. “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.”
Industry reactions
Tom Bill, head of UK residential research at Knight Frank, said, “Stable mortgage rates have supported demand in recent months, and the bank rate is now on a downward path. But a tax-raising Budget will curb buying power and weigh on sentiment, keeping a lid on housing market activity next year.”
Matthew Thompson, Head of Sales at Chestertons, says, “October’s property market was noticeably calmer as many buyers have paused to see what the Budget might bring. Some buyers remained active and were able to secure good opportunities, particularly where sellers were willing to negotiate. Once there is more clarity from the Chancellor’s announcements, we expect buyer activity to pick up as those waiting on the sidelines re-enter the market.”
Nathan Emerson, CEO of Propertymark, comments, “Any rise in house prices is a welcome sign of growing confidence in the UK housing market. It suggests that demand remains strong and that recent economic adjustments are beginning to bear fruit. 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.”
Verona Frankish, CEO of Yopa, commented, “Despite the economic headwinds and political noise ahead of the Autumn Budget, it seems as though the rush to complete before Christmas is well and truly on."
"A late seasonal surge in market activity has not only helped the monthly rate of house price growth to rebound, but we’ve also seen the annual rate of increase strengthen as well."
"This is the real evidence of improving market health and, all in all, we’re set to finish the year on a very strong footing, all things considered.”
Islay Robinson, CEO of Enness Global, commented, “The housing market has continued to demonstrate a calm determination and whilst we’ve seen a degree of hesitancy throughout the year, it seems as though buyers and sellers are throwing caution to the wind, with a late sprint to the finish line regardless of what might come in the Autumn Budget."
"The desire to transact before year-end is clearly outweighing any short-term political or fiscal uncertainty, and it’s a strong finish to what has been a surprisingly resilient year for the market.”
Marc von Grundherr, Director of Benham and Reeves, said, “The property market continues to display remarkable consistency given the wider economic backdrop, with the latest Halifax figures showing that the monthly rate of growth has bounced back following a marginal decline in September.
"Buyers remain active, mortgage approvals are robust and, even with the Autumn Budget looming, many are pressing ahead to complete before Christmas."
"The underlying message is one of steady resilience rather than dramatic recovery, and that’s no bad thing.”
Shepherd Ncube, Founder and CEO of Springbok Properties, commented, “While the latest data shows small but positive steps for the market, the reality on the ground remains far more testing for sellers."
"Market hesitation is rife and whilst sellers are securing a fair price, it’s taking many months before they find a buyer willing to commit."
"Those with ambitions of moving Christmas may well find themselves disappointed, even if they already have a buyer, as the overarching air of market instability is also leading to a greater propensity for sales to fall through at the final hour."
