UK house prices rose 4.5 per cent in October and will likely continue this growth into the coming year.
The annual increase was up from September’s figure of 4 per cent, with the 0.5 per cent rise marking the largest monthly growth since February. This brings the average price of a UK investment property to a record high of £225,826.
The growth in house prices will be supported by cheap mortgages and high employment rates, according to Halifax, who compiled the data. The base rate rise was also not flagged as an issue.
Managing director of Halifax Community Bank, Russell Galley, said: ‘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.’
The Bank of England raised interest rates last week for the first time in a decade in order to curb high inflation rates.
However, Samuel Tombs, the chief UK economist at Pantheon Macroeconomics, doubted the viability of the the Halifax data, arguing that measure was out of line with other indicators. He said: ‘The Halifax data are particularly volatile, so we’re inclined to place more weight on the Nationwide and Rightmove measures.’
Halifax judged prices to rise 2.3 per cent on a quarterly basis, whilst Nationwide and Rightmove saw growth of 0.8 per cent and 0.2 per cent respectively in October.
The founder director of estate agent James Pendleton, Lucy Pendleton, was optimistic: ‘We’ve since had a rate rise but what you’re seeing isn’t one last hurrah as people rush to grab the best mortgage rates. It’s that same old ball and chain around the UK property market’s neck – weak supply. There will also be an echo from September’s back-to-work bounce, as deals brokered before the summer holidays complete in the autumn, but such a strong second month is uncharacteristic and shows the market in surprisingly rude health.’