UK households who are paying off a mortgage handed free £492

UK households have been handed a major boost as house prices rose by over £400 today. Average house prices have risen to a new all-time high of £293,333 – some £492 above the previous record in June 2022, Halifax has found this week.

Amanda Bryden, Head of Mortgages, Halifax, said:"Average UK house prices nudged up +0.2% in October, continuing the positive momentum of recent months. This brought the annual growth rate to 3.9 per cent, slightly lower than 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’." Craig Fish, Director at Lodestone Mortgages & Protection, said: "The increased demand that we have seen during the last few months due to lower mortgage rates has further bolstered house prices.

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“Once the fallout of the Budget settles, this is likely to continue. It would appear that this government are going to fall a long way short of solving the deep housing problem on our small island and so house prices, as always, will continue their ascent to ever new highs."

Ms Bryden said: "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. 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 per cent increase overall.

"That’s a significant slowdown compared to the 21 per cent rise we saw in the equivalent period from January 2020 to the summer of 2022. Despite the affordability challenge, market activity has been improving. The number of new mortgages agreed recently reached its highest level in two years.

"This aligns with average mortgage rates dropping steadily since spring - now over 160 basis points lower than in summer 2023 – coupled with continued positive income growth. 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.

"While we expect house prices to keep growing, it will likely be at a modest pace for the rest of this year and into next."