Halifax reports record high average house price for UK in October

Halifax’s House Price Index for October reports a record high for average house prices, topping £270,000 for the first time.

The highlights of the report include:

• Average UK property price now a record £270,027
• Annual house price inflation up to 8.1%, up from 7.4%
• Wales, Northern Ireland and Scotland continue to outperform the UK average

Lucy Pendleton, property expert at independent estate agents James Pendleton, comments: “Annual house price growth hasn’t been stronger since the sunset of the best Stamp Duty savings five months ago.

“However, it’s no magic trick. Despite the Bank of England’s reluctance to raise interest rates this week, everyone knows it’s coming and the only good reason to delay is if your employment situation is precarious.

“That means if someone is thinking of a move, the thought of putting it off and buying with not one but two rates rises possibly behind them by next summer is providing the motivation to just get on with it. That determination is particularly acute for first-time buyers who are more vulnerable to small rises in interest rates and often stretch their budget as far as possible.

“While some predict a cooling in demand as rates begin to rise, the opposite may be true in the short term. Even if rates reach 1% by the end of next year, it’s a long way short of the 5% that many older homeowners consider normal. A tangible rush to buy could last another 12 months at least. 

“Pair that off with low stock and a tight jobs market, and the result is a market that, despite massive rises, seems to just be hanging there in the air.

“It’s a case of so-far-so-good this autumn. The final quarter of the year was always billed as the point at which we would discover how the UK was going to fare with the crutches kicked away but, thanks to the furlough scheme, job security isn’t a threat looming over demand in the way that was once feared.”

Iain McKenzie, CEO of The Guild of Property Professionals, says: “The house price boom continued in October, and with an interest rate rise put on hold this week, it looks like the upwards trend will continue for the coming months. 

“It’s jaw-dropping to think that the average property is now worth £270,000. In November 2011, the equivalent house cost £167,757, meaning that prices have risen by more than £100,000 in ten years.

“Despite this, first-time buyers have been making the most of low borrowing rates to get on the property ladder, and are partly responsible for driving prices up.

“A desire for more space among home-owners is causing demand to outstrip housing supply, and a resilient labour market means that many people still feel confident in committing to a mortgage.

“One thing is for certain, though – this is a seller’s market. If you are considering selling your home, you could find that the time it takes to sell will be measured in hours, not days.”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, says: “It seems like nothing can stand in the way of Britain’s blistering housing market.

“Soaring inflation, increased taxes and the end of the Stamp Duty have so far failed to dampen what remains a red-hot sellers market.

“Even the threat of increased borrowing costs appears to have made little difference as the huge imbalance between supply and demand continues to fuel robust price growth right across the country.

“The frenetic pace we’ve seen this year has left many gasping for air and, while some still predict that the weakening outlook for the economy will eventually cause prices to flatline, in reality these pressures may take a long time to exert any meaningful effect.

“Even if the Bank of England begins increasing its base rate next month, this is unlikely to have any impact on the housing market until well into next year.

“More records are being broken every month and those experts predicting a dip may end up waiting a very long time before their prophecies come true.”