UK house prices hit record £299,862 in October as mortgage rates ease

Demand from home buyers has held up well moving into autumn, Halifax said (Yui Mok/PA Archive) Yui Mok

The average UK house price reached a record high of £299,862 in October, marking a monthly increase of 0.6% or £1,647. This represents the biggest monthly rise since January, with annual growth accelerating to 1.9% from 1.3% in September.

Buyer demand has remained resilient despite market uncertainty. The number of new mortgage approvals hit its highest level this year, signaling sustained interest in property purchases even as prices climb to unprecedented levels.

Easing borrowing costs

The Bank of England held its base rate at 4% on Thursday but indicated inflation has peaked, raising hopes for future rate cuts. Average fixed mortgage rates have eased to around 4%, with many lenders cutting fixed-rate products in recent days. Two and five-year fixed rates have fallen below 5%, according to financial information website Moneyfacts.

Amanda Bryden, head of mortgages at Halifax, said: «Demand from buyers has held up well coming into autumn, despite a degree of uncertainty in the market.» She acknowledged affordability remains challenging with property prices at record levels and rising costs for everyday essentials squeezing disposable incomes. «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,» Bryden added.

Mixed outlook amid Budget uncertainty

Market experts expressed cautious optimism tempered by concerns. Sarah Coles, head of personal finance at Hargreaves Lansdown, warned: «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.» However, she noted slower price rises give first-time buyers more time to build deposits and emergency savings.

Regional data shows significant variation across the UK. Northern Ireland led with 8% annual growth, while London experienced a 0.3% decline. The North East saw 4.1% growth, Scotland 4.4%, and the North West 3.6%. The South East recorded a marginal 0.1% decrease.

Note: This article was created with Artificial Intelligence (AI).