UK house prices experienced their strongest monthly growth since January during October, as resilient buyer demand continued to drive the market forward despite ongoing economic uncertainties.
Market Momentum Builds
According to the latest Halifax house price index, property values increased by 0.6 per cent last month, marking the fourth price rise in five months. This rebound follows a sharp 0.3 per cent decline recorded in September.
The typical UK property price has now reached a new record high of £299,862, while annual growth has also strengthened to 1.9 per cent. The capital city of London remains the most expensive region, with average properties costing £542,273, despite prices falling by 0.3 per cent on an annual basis.
Nathan Emerson, chief executive of Propertymark, commented: "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."
Affordability Challenges Persist
While rising prices indicate growing wealth for some homeowners, particularly at the upper end of the market, many potential buyers continue to face significant financial barriers.
Amanda Bryden, head of mortgages at Halifax, explained: "There is no doubt that affordability remains a challenge for many. Average fixed mortgage rates are currently around four per cent and likely to ease down further, but with property prices at record levels, moving homes can feel like a stretch."
She noted that increasing costs for everyday essentials are squeezing disposable incomes, affecting how much people can allocate toward property purchases. However, buyers have shown resilience by adopting strategies such as smaller deposits and longer mortgage terms to manage costs.
The Bank of England's decision to maintain interest rates at four per cent for the second consecutive month has provided market stability. Jason Tebb, president of Onthemarket, stated: "Yesterday's hold in rates, while not delivering the further reduction borrowers would have wanted, does suggest a stability in the market which is encouraging."
Budget Concerns Loom
As the November Budget approaches, speculation around potential property tax changes is creating uncertainty in certain market segments.
Rumours include possible introduction of a 'mansion tax' - an annual one per cent charge on property values exceeding £2 million - alongside reforms to stamp duty and the application of national insurance to landlords' rental incomes.
Tom Bill, head of UK residential research at Knight Frank, warned: "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."
Despite these concerns, Halifax anticipates that the trend of gradually improving affordability will continue, as house prices are rising more slowly than household incomes.
