The UK housing market has reached a historic milestone, with the average property price climbing to a new record high in October, according to the latest data from Halifax.
While the national picture shows robust growth, one major city has defied the upward trend, experiencing a noticeable dip in values.
National Peak and Regional Divergence
The average UK house price now stands at £299,862, marking a monthly increase of £1,647, or 0.6%. This represents the strongest monthly growth rate seen since January.
On an annual basis, price growth has also accelerated, rising to 1.9% in October, up from 1.3% the previous month.
However, this overall growth masks significant regional disparities. London has emerged as a notable exception, with property values falling by approximately 0.3% month-on-month. The capital's average house price now sits at around £542,273.
A similar, though milder, trend was observed in the South East of England, where prices declined by 0.1%. This contrasts sharply with other parts of the UK.
Winners and Market Drivers
At the other end of the spectrum, Northern Ireland recorded the highest annual house price increase in the UK at a substantial 8%. The North East of England followed in second place with a solid 4.1% growth.
Amanda Bryden, Head of Mortgages at Halifax, pointed to sustained buyer demand as a key factor preserving market resilience into the autumn season.
She stated: ‘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.’
Affordability Challenges and Future Outlook
Despite the positive demand, Bryden highlighted that affordability remains a pressing issue for many. Average fixed mortgage rates are currently hovering around 4%, and while they are expected to ease, the combined cost of borrowing and rising day-to-day expenses continues to limit disposable incomes and constrain spending power.
In response, many buyers are adapting by opting for smaller deposits and longer-term mortgages, a strategy that is helping to maintain activity levels in the market.
There is a silver lining, as Bryden also noted that house prices have been rising more slowly than incomes for nearly three years, leading to a gradual improvement in affordability over the longer term.
The Bank of England's recent decision to hold the base rate steady at 4% has raised expectations for future interest rate cuts, signalling that inflation may have peaked.
Nonetheless, analysts warn that wider economic uncertainties, including a weakening employment market and potential impacts from the forthcoming Budget, could still dampen buyer confidence and hinder the market's modest recovery.
