The average price of a home in the UK increased by 0.6% in October, which is equivalent to a rise of £1,647. This pushed the typical property price to £299,862. According to the latest Halifax House Price Index, this represents the largest monthly increase seen since January.
On an annual basis, house prices also showed stronger growth. Prices were up by 1.9% compared with the same period last year, an improvement from the 1.3% yearly increase recorded in September.
Halifax also reported that mortgage approvals have reached their highest level so far this year. This suggests that demand from buyers has remained relatively steady, even as the housing market continues to face uncertainty.
Across the UK, Northern Ireland once again recorded the fastest pace of annual house price growth. Property values in the region have climbed by 8% over the past year, bringing the average home price there to £219,646.
Scotland also experienced notable growth in October. House prices rose by 4.4% year-on-year, with the typical property now valued at £216,051.
In Wales, average property prices increased by 2% compared with the previous year. This places the typical Welsh home at a value of £229,558.
Within England, the North East recorded the strongest annual growth rate. Property prices in the region rose by 4.1%, reaching an average of £180,924.
Meanwhile, house prices in London dipped slightly during October, falling by 0.1%. Despite this small decline, the capital continues to hold the highest property prices in the UK, with the average home costing £542,273.
Amanda Bryden, head of mortgages at Halifax, said that buyer demand has remained relatively strong as the market moves into the autumn months. She noted that mortgage approvals have recently reached their highest level this year, indicating continued interest from buyers despite wider economic uncertainty.
However, affordability remains a key challenge for many people hoping to buy a home. Average fixed mortgage rates are currently around 4%, and although they may ease slightly in the future, the high cost of property still makes moving home difficult for many households.
Bryden added that some buyers are adapting their borrowing strategies in response to these pressures. Many are choosing to put down smaller deposits or extend the length of their mortgage terms in order to make monthly repayments more manageable.
She also pointed out that house prices have grown more slowly than incomes for nearly three years. This trend has gradually helped to improve affordability, and Halifax expects this slow improvement to continue over time.
The latest house price figures were released shortly after the Bank of England decided to keep its base interest rate at 4%. As the central bank’s rate heavily influences mortgage pricing, this decision may disappoint borrowers who had hoped for lower borrowing costs.
Ian Futcher, a financial planner at Quilter, suggested that the decision to keep interest rates unchanged may cause some prospective buyers to hesitate. With another potential rate cut expected early next year, some buyers may prefer to wait in the hope of securing more favourable mortgage deals.
Ashley Webb, a UK economist at Capital Economics, said the increase in house prices during October indicates that housing demand has been more resilient than some earlier indicators suggested, particularly given the uncertainty surrounding recent government budget decisions.
However, Webb also warned that this level of growth may not continue. Weak employment growth and evidence from the Royal Institution of Chartered Surveyors showing more homes becoming available for sale could limit future price increases.
As a result, Capital Economics expects property prices to grow at a more modest pace in the months ahead rather than continuing at the same rate seen recently.
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