The average UK house price jumped to a new record high of £299,862 in October after jumping by £1,647 month-on-month, according to an index.
Property values increased by 0.6% month-on-month in October, following a monthly fall of 0.3% in September, Halifax reported.
The annual rate of house price growth also accelerated, reaching 1.9% in October, from 1.3% in September.
Amanda Bryden, head of mortgages, Halifax, said: “October saw the biggest monthly rise in UK house prices since January this year, with the value of the average UK home increasing by 0.6% (£1,647).
“That brings the typical property price up to £299,862 – the highest on record – while annual growth also increased to 1.9%.
“Demand from buyers has held up well coming into autumn, despite a degree of uncertainty in the market, with the number of new mortgages being approved recently hitting its highest level so far this year.
“There is no doubt that affordability remains a challenge for many. Average fixed mortgage rates are currently around 4% and likely to ease down further, but with property prices at record levels, moving home can feel like a stretch.
“Rising costs for everyday essentials are also squeezing disposable incomes, which affects how much people are willing or able to spend on a new property.
“Even so, while there has been some volatility, the market has proven resilient over recent months, as many buyers opt for smaller deposits and longer terms to help make the numbers work.
“With house prices rising more slowly than incomes for almost three years now, we expect the trend of gradually improving affordability to continue.”
The Bank of England left the base rate on hold at 4% on Thursday, but many mortgage lenders have been cutting the fixed-rate products they are offering in recent days in response to swap rate movements and also looking to secure final business before the end of the year.
There were also positive signs on Thursday as the Bank of England suggested that inflation has now peaked – and is expected dip over the coming months.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “The fact that the Bank of England thinks inflation has peaked, so more rate cuts could be on the way, will help.
“Meanwhile, the easing of average fixed rate mortgages over both two and five years below 5% (according to data from financial information website Moneyfacts) is a positive sign of the better deals around.
“However, this is like spotting the slivers of blue sky on a November morning. The positives are there, but you have to overlook an awful lot of gloom to see it.
“Higher house prices, a weakening employment market, the rising cost of living and worries over what the Budget might hold, all risk derailing house purchases. There may be modest growth from the market in the immediate future, but if the Budget knocks lumps out of buyer enthusiasm, all bets are off.
“However, slower house price rises mean first-time buyers have more time to work on their deposit, top up their Lifetime Isa, and build their emergency savings. This should put them in a decent position to negotiate a deal on their first home when the time is right.”
Ian Futcher, a financial planner at wealth manager Quilter, said months of speculation over the autumn Budget “has driven caution across all aspects of personal finances, and the housing market had been bearing much of the brunt”.
He added: “The market impact of the rumours around possible changes to property taxation has seemingly been countered by lower borrowing costs, which have been very gradually easing affordability constraints.”
Tom Bill, head of UK residential research at Knight Frank, said: “Stable mortgage rates have supported demand in recent months and the (Bank of England base rate) is now on a downward path.”
Iain McKenzie, CEO of The Guild of Property Professionals, said: “Looking ahead, we expect affordability to gradually improve as wage growth continues and borrowing costs ease once the Bank of England begins to lower rates again.
“Overall, the market is showing cautious confidence, steady, not spectacular, but underpinned by genuine activity and improving fundamentals. This stability should give both buyers and sellers reassurance as we move towards the end of the year.”
Jeremy Leaf, a north London estate agent, said: “Once again, the market is baring its teeth. Although sentiment is split between upsizers who believe prospects will improve and downsizers who think it may deteriorate as a result of Budget measures, fortunately enough buyers and sellers have confidence in longer-term prospects.”
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said: “Sellers are pricing more competitively, recognising buyers face higher up-front costs since April’s stamp duty changes and are wary of future tax reforms. This could present a buying opportunity for savvy buyers, particularly if sellers are keen to move quickly, so keep an eye out for potential deals.”
Jonathan Hopper, CEO of Garrington Property Finders, said: “Many buyers have simply pressed pause on their search, but we are seeing some capitalise on the sudden drop-off in competition and the abundance of homes for sale to pounce on the best properties and secure big discounts off the asking price.
“Yet this is a market that feels suspended between confidence and caution. Every move is tactical, every deal is hard-fought, and sentiment is fragile.”
Matthew Thompson, head of sales at London-based estate agent Chestertons, said: “October’s property market was noticeably calmer as many buyers have paused to see what the Budget might bring. Some buyers remained active and were able to secure good opportunities, particularly where sellers were willing to negotiate.”
Babek Ismayil, CEO and founder of home buying platform OneDome, said: “With the average home now approaching £300,000, we could see prices tip over that landmark figure before the year ends – a clear sign of the market’s underlying strength.”
Jonathan Handford, managing director at estate agents Fine & Country, said: “Today’s figures are a clear sign that the market is stirring back into life after what has been a fairly steady year for house prices. This uptick reflects easing affordability pressures, stabilised mortgage costs and an underlying buyer confidence that remains intact.”
Here are average house prices and annual increases or decreases across the UK, according to Halifax. Regional annual change figures are based on the most recent three months of approved mortgage transaction data:
East Midlands, £244,989, 0.9%
Eastern England, £334,934, 0.2%
London, £542,273, minus 0.3%
North East, £180,924, 4.1%
North West, £244,774, 3.6%
Northern Ireland, £219,646, 8.0%
Scotland, £216,051, 4.4%
South East, £388,235, minus 0.1%
South West, £305,109, 0.4%
Wales, £229,558, 2.0%
West Midlands, £260,116, 1.0%
Yorkshire and the Humber, £216,746, 2.5%
