U.K. house prices hit a new record high in October, rising 0.2 percent from September, a fourth consecutive monthly increase. Year-on-year prices rose 3.9 percent, also slower than the 4.6 percent expansion in September.
“The average property price has reached a record high of £293,999, surpassing the previous peak of £293,507 set in June 2022, towards the end of the pandemic-era ‘race for space’. 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,” stated Amanda Bryden, head of mortgages, Halifax.
Northern Ireland records strongest price growth
The Halifax House Price Index revealed that U.K. house prices reached £293,999, surpassing the previous peak set in June 2022 at £293,507. Northern Ireland continued to record the strongest annual house price growth in the U.K., rising by 10.2 percent on an annual basis in October. The average price of a property in Northern Ireland is now £204,242.
House prices in Wales also recorded strong growth, up 5.6 percent with properties now costing an average of £225,543. Once again Scotland saw a more modest rise in house prices, where a typical property now costs £206,480, 1.9 percent more than the year before.
Meanwhile, the North West remains the region of England with the strongest growth, up by 5.9 percent over the last year to £235,587. London continues to have the most expensive house prices in the U.K., now averaging £543,308, up 3.5 percent compared to last year.
“Despite the headwind of higher interest rates, house prices have mostly leveled off over the past two and a half years, recording a 0.2 percent increase overall. That’s a significant slowdown compared to the 21 percent rise we saw in the equivalent period from January 2020 to the summer of 2022,” Bryden added.
Read: U.S. existing home sales fall to 14-year low in September 2024
Mortgage activity surges
HMRC monthly property transaction data shows U.K. house sales increased in September 2024 compared to the previous month. U.K. seasonally adjusted residential transactions in September 2024 totaled 91,820, up by 0.9 percent from August’s figure of 91,020. Quarterly seasonally adjusted transactions in Q3 were approximately 0.2 percent higher than the preceding three months. Year-on-year, seasonally adjusted transactions were 8.9 percent higher than September 2023.
In addition, the latest Bank of England figures show the number of mortgages approved to finance house purchases increased in September 2024 by 1.1 percent to 65,647. Year-on-year, the figure was 49.3 percent above September 2023.
“Looking ahead, borrowing constraints remain a challenge for many buyers. Following the budget, markets expect the Bank of England to cut rates more slowly than previously anticipated, which could keep mortgage costs higher for longer. New policies like higher stamp duty for second-home buyers and a return to previous thresholds for first-time buyers might also affect demand,” she added.
While Halifax expects U.K. house prices to keep growing, it will likely be at a modest pace for the rest of this year and into next.
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