Despite recent changes in the market UK house prices are continuing to rise Halifax bank reported yesterday (7th November) that property prices in August, September and October were 2.3% higher in the previous three months. This is the fastest price growth since January. Looking at the figures on an annual basis, they are now 4.5% higher – meaning that the average house price in the UK today – £225,826 – is the highest average house price on record. This is 2.8% higher than January when the average house cost around £5,000 less.
According to Halifax, the growth has been driven by thigh employment rates, coupled with a lack of available properties in the market and historically low mortgage rates. Managing Director at Halifax Community Bank told the Telegraph that these factors will continue to support house prices and are likely to continue to do so over the coming months:
“The annual rate of growth has continued to rise for the third month in succession, rising from 4% in September to 4.5pc in October. Increasing pressure on household finances and continuing affordability concerns are some of the factors likely to dampen buyer demand. That said, we do not anticipate the base rate rise will be a barrier to buying a house.”
Galley expects the rate of growth to continue despite of the recent increase in interest rates last week when The Bank of England raised them for the first time in a decade in order to address the problems caused by high inflation putting pressure on UK households in other ways.
The base rate was increased from 0.25%to 0.5%, and many mortgage lenders reacted to the hike by immediately increasing their rates – prompting fears that many homeowners could be hit by higher bills – whether from mortgage increases or landlords putting up rents to cover their own mortgage increase. There was also concern that the uncertainty over interest rates could put off potential first-time buyers.
Last week Nationwide’s house price index also reported similar indications that UK house prices were experiencing growth, but unlike Halifax they suggested that the market in general remained passive. Responding to Nationwide’s report, Chief Executive of HouseSimple, Alex Gosling told the Telegraph that the housing market still feels flat and is in need of a spark.