Halifax Reports Record High for UK House Prices

The average house price across the UK reached an unprecedented level last month, according to Halifax. The nation’s largest mortgage provider indicated that the average price hit £293,999 in October, exceeding the previous high of £293,507 recorded in June 2022. Halifax projected that property values would continue their ascent at a “modest pace” over the coming months. Nevertheless, the lender cautioned that mortgage expenses might persist as “higher for longer” in the aftermath of last week’s Budget announcement. Subsequent to the Budget, which outlined intentions to borrow and allocate billions of pounds, financial markets are now anticipating that the Bank of England will reduce interest rates at a slower pace than initially foreseen. On Thursday, the Bank lowered its primary interest rate to 4.75% from 5%, a move that was widely expected. Following its decision, Bank governor Andrew Bailey stated that interest rates would “continue to fall gradually from here”. He did, however, advise that “we can’t cut interest rates too quickly or by too much” to maintain inflation near its 2% target. Halifax reported a marginal 0.2% increase in house prices during October, marking the fourth consecutive month of rising property values. According to Halifax, house prices have risen by 3.9% compared to the previous year, representing a modest decline from the 4.6% annual growth observed in September. In her remarks regarding the new record high, Amanda Bryden, head of mortgages at Halifax, commented: “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.” She continued: “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 further indicated that recent Budget announcements, including increased stamp duty for individuals purchasing second homes and a reversion to earlier thresholds for first-time buyers, might negatively impact property demand. However, she also noted an improvement in market activity, with the volume of newly agreed mortgages recently reaching its highest point in two years. Currently, stamp duty is not levied on properties valued below £250,000. This exemption limit was raised from £125,000 as part of Liz Truss’ mini-Budget in September 2022. First-time buyers are exempt from stamp duty on homes priced up to £425,000, a threshold that was increased from £300,000. These elevated thresholds are scheduled to revert to their prior levels in March 2025. David Stirling, an independent financial adviser associated with Mint Mortgages & Protection, observed: “Estate agents are busy even in a higher interest rate environment and mortgage applications and approvals are still strong.” London continues to hold its position as the most costly location in the UK for property acquisition. The average property price in London now stands at £543,308, marking a 3.5% increase from the previous year, according to Halifax. Northern Ireland has sustained its distinction for exhibiting the most robust annual house price growth across the UK. The average cost of a property in Northern Ireland is currently £204,242. Within England, the North West region experienced the most significant growth, with prices increasing by 5.9% over the past year, bringing the average house price to £235,587. Property values in Wales also demonstrated substantial growth, rising by 5.6% year-on-year, with homes now averaging £225,543. In Scotland, the cost of a typical property is now £206,480, reflecting a 1.9% increase compared to 2023. Further details are available here. Copyright 2024 BBC. All rights reserved. The BBC disclaims responsibility for the content found on external websites. Information regarding our external linking policy can be found here.