UK house prices tick up to record high in October - Halifax

UK house prices ticked up to a record high in October as mortgages became more affordable, according to data released on Thursday by lender Halifax.

House prices rose 0.2% on the month following a 0.3% increase in September. On the year, prices were up 3.9% in October following a 4.6% increase the month before.

The average price of a home rose from £293,305 in September to £293,999. This was above the previous peak of £293,507 set in June 2022, towards the end of the pandemic-era "race for space".

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, 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. That’s a significant slowdown compared to the 21% rise we saw in the equivalent period from January 2020 to the summer of 2022.

"Despite the affordability challenge, market activity has been improving. 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.

"Looking ahead, borrowing constraints remain a challenge for many buyers. Following the budget, markets expect the Bank of England to cut rates more slowly than previously anticipated, which could keep mortgage costs higher for longer. New policies like higher stamp duty for second home buyers and a return to previous thresholds for first-time buyers might also affect demand.

"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."