House prices in the United Kingdom have climbed to a new record high, marking the biggest monthly rise since January, according to the latest data from Halifax. The figures point to a housing market that continues to show strength despite ongoing cost-of-living pressures and broader economic uncertainty.
In October, the average property value rose by £1,647, representing an increase of 0.6 per cent. This latest rise follows several months of steady growth, adding to signs that confidence is slowly returning among buyers and sellers alike.
Halifax’s report shows that prices have now risen in four of the past five months. This consistent pattern suggests that demand for housing remains stable even as some households continue to face financial constraints.
The data also revealed that the average cost of a home has now reached £299,862 – the highest figure ever recorded by the lender. This milestone reflects not only strong buyer demand but also the limited supply of homes available across many parts of the country.
When looking at the broader picture, property prices are now up by 1.9 per cent compared with the same time last year. That’s a notable jump from the 1.3 per cent annual increase seen in September, signalling that the market’s pace of growth is picking up again.
Halifax also reported that mortgage approvals have reached their highest level this year. This indicates that more people are securing finance to buy property, showing that demand for homeownership has not been dampened by higher borrowing costs.
Amanda Bryden, Head of Mortgages at Halifax, said that the data demonstrates a surprising level of resilience in the market. According to her, demand has held firm throughout the autumn months, even as buyers continue to adjust to economic challenges.
She added that many borrowers are finding creative ways to make property purchases work within their budgets. This includes choosing smaller deposits or longer mortgage terms to spread repayment costs more evenly and keep monthly payments affordable.
Bryden also mentioned that the housing market has benefited from a period in which house prices have risen more slowly than incomes. For nearly three years, this trend has helped gradually improve affordability, encouraging more people to take their first steps onto the property ladder.
Adding to this momentum, mortgage rates have been trending downward in recent weeks. Major lenders such as HSBC, Barclays, NatWest, Halifax, Santander, and Nationwide have all introduced rate cuts, with some adjusting their offers more than once in a short span of time.
At present, the most competitive two-year fixed deal for home movers with a 40 per cent deposit is available at 3.64 per cent, while the lowest five-year fixed rate stands at 3.89 per cent. For buyers with smaller deposits of 10 to 20 per cent, rates can be found as low as 4.12 per cent.
To put these numbers into perspective, a £200,000 mortgage on a 25-year term at a 4.12 per cent rate would mean a monthly repayment of roughly £1,069. For many buyers, such rates are seen as manageable compared to earlier in the year when average mortgage costs were significantly higher.
However, industry experts are warning that the upcoming Budget could bring fresh challenges. Tom Bill, Head of Research at Knight Frank, noted that while stable mortgage rates have boosted buyer confidence, the possibility of tax increases could offset some of these gains.
He pointed out that rumours of an income tax rise have already started to affect market sentiment. Should the Government introduce further fiscal tightening, it could reduce buyers’ purchasing power and slow housing activity into the new year.
Looking at regional trends, house prices in the North of England and Scotland continue to rise strongly. The North East recorded a 4.1 per cent annual increase, while Scotland saw growth of 4.4 per cent. In contrast, London has experienced a slight annual decline of 0.3 per cent, with more pronounced drops in higher-value areas.
Property analyst Jonathan Hopper, Chief Executive of Garrington Property Finders, explained that much of the current divide between northern and southern markets stems from Budget-related uncertainty. He said that the South East, home to many higher-value properties, is likely to face greater pressure if new property or income taxes are introduced.
Hopper described the housing market as “suspended between confidence and caution”, where every transaction requires careful negotiation. He added that the upcoming Budget announcement could either unlock pent-up demand or dampen activity further, depending on how the Government addresses taxation and affordability.
Despite these mixed signals, the broader outlook remains cautiously optimistic. With interest rates stabilising, mortgage deals improving, and wages rising faster than house prices, many analysts expect affordability to continue to improve gradually over the coming months.
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