The latest Halifax House Price Index shows the average UK house price reached £293,999 in October, marking a 0.2% monthly increase and a 3.9% annual rise.
This level surpasses the previous peak set in June 2022 during the pandemic-driven housing boom.
Amanda Bryden, head of mortgages at Halifax, said: “Average UK house prices nudged up +0.2% in October, continuing the positive momentum of recent months. This brought the annual growth rate to +3.9%, slightly lower than in September. The average property price has reached a record high of £293,999, surpassing the previous peak of £293,507 set in June 2022, towards the end of the pandemic-era ‘race for space’.”
Bryden highlighted that current prices may surprise some observers given economic challenges but added: “That house prices have reached these heights again in the current economic climate may come as a surprise to many, but perhaps more noteworthy is that they didn’t fall very far in the first place. Despite the headwind of higher interest rates, house prices have mostly levelled off over the past two and a half years, recording a +0.2% increase overall.”
Bryden also noted the affordability challenge that persists, despite improved market activity and declining mortgage rates: “The number of new mortgages agreed recently reached its highest level in two years. This aligns with average mortgage rates dropping steadily since spring… now over 160 basis points lower than in summer 2023 – coupled with continued positive income growth.” However, she cautioned that borrowing constraints and potential new policies could temper future growth. “While we expect house prices to keep growing, it will likely be at a modest pace for the rest of this year and into next.”
Nathan Emerson, CEO of Propertymark, remarked on potential shifts following the recent Budget: “Following the recent Budget there is potential the housing market may see an increased momentum across the winter months… Increases will impact buyers across England and Northern Ireland, with some seeing Stamp Duty costs typically increase by around £2,500.”
Mark Harris, CEO of SPF Private Clients, commented on the market dynamics, stating: “The housing market has been significantly buoyed by lower mortgage rates, leading to more interest from prospective buyers and increased activity… The Bank of England is still expected to cut interest rates later today which would help boost confidence and affordability.”
Further reaction
Maeve Ward, head of intermediary sales at Together:
“Despite the blows from last week’s tax-heavy Budget, house prices have risen further, by 0.2% likely in reaction to today’s anticipated further interest rate cut.
“Activity should continue to pick up due to the £500m additional funding announced by the Chancellor for the Affordable Homes Schemes and £5bn commitment to deliver 1.5 million homes across the term of this parliament and £50m to turbocharge planning reform – all of which should offer options for hopeful first-time buyers and house builders.
“However what’s not yet clear – especially as we know three in five potential mortgage borrowers fear being locked out of buying a home next year from our own research at Together – is whether this level of investment will be enough to meet Labour’s ambitious targets.
“Those primed to act on property plans should speak to a professional and explore the range of specialised mortgage products and schemes available.”
Holly Tomlinson, financial planner at Quilter:
“The Halifax House Price Index for October reveals that UK house prices have risen by 0.2% month-on-month, bringing the annual change to 3.9%. This represents record levels just beating the previous high set towards the end of the pandemic’s race for space. Despite the increase, this latest data shows how budget uncertainty eased the year-on-year price growth, which had been 4.6% in September, as buyers and sellers braced for potential changes that could derail their plans.
“Following the budget, the Government’s new 5% stamp duty surcharge on second homes marks a bold move to curb demand from buy-to-let investors and second-home buyers. The policy aims to make primary homeownership more accessible, especially in popular areas where house prices have surged due to demand for rental and holiday properties. However, with buy-to-let investors potentially being priced out, rental supply may tighten further, especially in already-competitive urban areas, adding fuel to the rental price surge.
“First-time buyers also face a narrowing window of opportunity due to changes announced last week. The government confirmed the current stamp duty threshold of £425,000 will drop back to £300,000 in March 2025. This looming deadline could spur a rush to buy, adding to market activity in the months ahead as potential homeowners look to beat the cut-off. Yet, with mortgage rates still elevated, affordability remains a challenge for many would-be buyers.
“Today’s Bank of England base rate decision adds yet another layer of interest for the housing market. While any changes will affect mortgage rates, particularly for those on variable and tracker deals, much of the anticipated base rate reductions have already been priced into fixed-rate products, so major rate shifts are unlikely right away. However, for borrowers on short-term deals or those nearing the end of their fixed-rate periods, today’s announcement could still shape refinancing options. Similarly, a decreasing base rate plays a huge part in increasing buyer confidence. However, that said, borrowers just yesterday had to face a flurry of lenders pulling five-year fixed rate deals which may have been in response to the US election news or in anticipation of the Bank of England interest decision.
“With so many moving parts in today’s housing market, from policy shifts to evolving mortgage rates, now is an essential time for homebuyers and investors alike to look to get mortgage advice to ensure they are getting the best possible deal for their circumstances.”
Tomer Aboody, director of specialist lender MT Finance:
“A confident finish to 2024 is in evidence, with buyers taking advantage of lower rates and lower inflation.
“As the Budget settles into the market, we expect interest rates to stay put for longer rather than decrease, which potentially will affect the positive upward trend going forward.
“Buyers currently have more choice of property, which is ensuring prices aren’t soaring to super high levels.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“Worries about the Budget did create some uncertainty among our buyers and sellers but many pressed the pause, rather than the stop, button.
“The underlying feeling is that interest rates will remain fairly stable or even drop a bit over coming months, which has underpinned confidence and activity.
“The increases in stamp duty for second homebuyers and landlords have resulted in some renegotiation of previously-agreed prices. But any small dip has been outweighed by new interest from first-time buyers keen to take advantage of competitively-priced property becoming available and their own stamp duty changes next spring.”
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:
“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:
“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.”
