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Average UK house price reached new record high in October although the market looks set to slow in the coming months, reported Halifax in its latest House Price Index, published this week
‘The average UK house price now tops a quarter of a million pounds (£250,457) for the first time in history, as annual house price inflation rose to 7.5 per cent in October, its highest rate since mid-2016’, said Halifax, said Halifax managing director Russell Galley. ‘Underlying the pace of recent price growth in the market is the 5.3 per cent gain over the past four months, the strongest since 2006. However, month-on-month price growth slowed considerably, down to just 0.3 per cent compared to 1.5 per cent in September.
‘Overall we saw a broad continuation of recent trends with the market still predominantly being driven by home-mover demand for larger houses. Since March flat prices are up by 2.0 per cent compared to a 6.0 per cent increase for a typical detached property. In cash terms that equates to a £2,883 increase for flats compared to a £27,371 rise for detached houses’.
Latest figures put home-buyer mortgage approvals at their highest level since 2007, ‘as transaction levels continue to be supercharged by pent-up demand’, said Galley.
Government support measures have helped to delay an expected downturn in the housing market but ‘they will not continue indefinitely’.
The macroeconomic landscape in the UK remains highly uncertain, said Galley. ‘With a number of clear headwinds facing the housing market, we expect to see greater downward pressure on house prices as we move into 2021’.
Halifax figures mirror those of Nationwide which put October house price growth at 5.8 per cent, and monthly rises of 0.8 per cent.
The annual rate of increase was the highest recorded by Nationwide since January 2015, said its chief economist Robert Gardner.
But, he added, ‘data suggests that the economic recovery has lost momentum in recent months with economic growth slowing sharply to 2.1 per cent in August, down from 6.4 per cent in July.
‘The outlook remains highly uncertain and will depend heavily on how the pandemic and the measures to contain it evolve as well as the efficacy of policy measures implemented to limit the damage to the wider economy’.