Over the month of October the value of properties in the UK grew by 0.2% but annually they rose by 3.9%.
Although this is a little less than the 4.6% annual growth in September, Halifax is describing this as ‘positive momentum’.
Indeed, it means a typical property now costs £293,999, which is higher than the previous peak in June 2022 when they reached £293,507.
This was during the ‘race for space’ when house prices soared as people sought to move to more rural locations following the pandemic.
Amanda Bryden, head of mortgages, Halifax, 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% increase overall.
“That’s a significant slowdown compared to the 21% rise we saw in the equivalent period from January 2020 to the summer of 2022.”
The outlook for the next few months is similar with Bryden suggesting growth will continue, albeit slowly.
“Looking ahead,” she said, “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.”
Impact of stamp duty changes
With the relief on stamp duty ending at the end of March 2025, experts have been expecting a rush of buyers who wish to purchase a home before the tax break ends.
But will this demand impact house prices in the first three months of the year?
Emma Jones, managing director at Whenthebanksaysno.co.uk, speaking via the Newspage Agency, said today’s figures from Halifax show the demand for home ownership was still very much here.
She added: “I would expect to see further momentum over the next few months especially for those making the most of the stamp duty incentives whilst they remain. “The property market has shown its underlying strength yet again despite the countless headwinds it has to endure.”
Holly Tomlinson, financial planner at Quilter, thought there were still challenges for buyers, however.
“This looming deadline could spur a rush to buy,” she said, “adding to market activity in the months ahead as potential homeowners look to beat the cut-off.
“Yet, with mortgage rates still elevated, affordability remains a challenge for many would-be buyers.”
