Halifax Reports a 1.1% Rise in UK Housing Prices for October

Posted on Tuesday, 7 November, 2023

The UK’s average house prices broke a streak of six consecutive monthly declines in October, witnessing an increase of nearly £3,000 compared to September’s values, as the cost of a typical home rose.

The latest data unveiled by Halifax has reported an unexpected surge in average housing prices for the month of October, marking the first increase since March, with prices rising by 1.1% in that month. The typical cost of a home in the UK now stands at £281,974, representing a gain of roughly £3,000 when compared to September.

However, despite these encouraging figures, the housing market as a whole remains subdued, as all UK regions and nations have witnessed declines in house prices on an annual basis.

House Prices Across Regions and Nations:

The steepest drop was observed in South East England, with prices decreasing by 6.0% over the past year, resulting in an average house price of £374,066.

Scotland displayed more resilience, with an annual house price decline of just 0.2%, bringing the average home price to £202,608. A similar scenario played out in Northern Ireland, where prices fell by 0.5%, and the average house price stands at £183,922.

Wales also saw a decrease in property prices, with a 3.9% annual drop, leaving the average house price at £213,125.

London retains its position with the highest average house price in the UK at £524,057, though it experienced a 4.6% decline in the past year.

Resilience in the First-Time Buyer Market:

Despite a general weakness in overall buyer demand, the first-time buyer market has demonstrated relative strength. Many individuals still find purchasing their first home appealing, particularly with the backdrop of rising rental prices.

Recent house price data indicates that prices for first-time buyers have decreased by 2.4% annually, which is notably less than the broader market’s 3.2% decline over the past year.

Kim Kinnaird, Director of Halifax Mortgages, pointed out that UK house prices increased by 1.1% in October, breaking a streak of six consecutive monthly declines. The average house price is now £281,974, up by almost £3,000 compared to the previous month. While prices are down 3.2% annually, this decline occurred at a slower pace than in September.

Kinnaird also noted that a cautious approach by prospective sellers has led to a limited supply of homes for sale, likely driving short-term price increases, as demand from buyers remains weak overall. Affordability challenges persist, despite some income growth through wage hikes.

Tom Bill, head of UK residential research at Knight Frank, believes that the UK housing market has been unusually weak in the autumn due to higher mortgage costs, interest rate uncertainty, and geopolitical factors. Monthly price movements should be interpreted carefully due to thin trading, but price declines have been mitigated by the hesitancy of both buyers and sellers. It is expected that house prices will continue to face pressure but may stabilize in 2024.

Nathan Emerson, CEO at Propertymark, highlights the challenges posed by high inflation and the need for interest rates to return to more favourable levels to restore market stability for both buyers and sellers.

Iain McKenzie, CEO of The Guild of Property Professionals, points out the ongoing demand for quality housing, especially among first-time buyers who feel trapped in an increasingly unaffordable rental market. He suggests that the upcoming Autumn Statement might introduce incentives to support prospective buyers and potentially extend schemes like the mortgage guarantee program.