The UK housing market delivered a significant surprise in October, with prices rising at their fastest pace since January and defying widespread economic uncertainty. Property values climbed 0.6% during the month, a sharp reversal from the 0.3% fall seen in September and well ahead of the 0.1% growth economists had predicted.
This surge has pushed the average cost of a UK home to a new record of $pounds$299,862. The annual figures also painted a stronger-than-expected picture, with price growth hitting 1.9%, again shooting past forecasts. The data suggests that buyer demand remains robust despite ongoing affordability issues and jitters over potential tax hikes.
Halifax, which compiled the index, reported that the number of new mortgages approved recently hit its highest point of the year. This indicates that buyers are still entering the market, even as they face significant financial hurdles.
Amanda Bryden of Halifax highlighted the primary challenge: affordability. While average fixed mortgage rates are hovering around 4% and may ease further, record-high property prices are forcing buyers to adapt. Many are using smaller deposits and extending their loan terms to secure a property.
The market’s strength is notable given the looming budget on November 26. Widespread discussion about potential changes to property taxes, such as replacing stamp duty, was expected to dampen activity, but the market appears to have largely shrugged off this uncertainty for now.