The UK housing market reached a new peak in October, with the average house price rising to nearly £300,000. But one major city has bucked the trend.
House prices have now reached a new record high of £299,862, according to Halifax, marking a monthly increase of £1,647, or 0.6%, representing the strongest monthly rise since January.
Annual price growth also accelerated to 1.9%, up from 1.3% in September.
But despite an overall upward trend in house prices across much of the country, London stood out as an exception.
The capital experienced a month-on-month decline in house prices of approximately 0.3%, with London’s average value now at around £542,273.
Similar trends were observed in the South East region, where house prices declined by 0.1%, contrasting sharply with other regions in the UK.
Although prices have fallen, London remains the most expensive part of the UK.
Northern Ireland saw the highest house price increase, at 8%, and the North East at came in second with 4.1%.
Halifax’s Head of Mortgages, Amanda Bryden, highlighted sustained buyer demand as a key factor preserving market resilience into the autumn.
She said: ‘Demand from buyers has held up well coming into autumn, despite a degree of uncertainty in the market, with the number of new mortgages being approved recently hitting its highest level so far this year.’
However, she added that affordability remains a pressing issue. Average fixed mortgage rates are hovering around 4% and expected to ease, but the current cost combined with rising day-to-day expenses limits disposable incomes and constrains buyers’ spending power.
Many buyers appear to be adapting by opting for smaller deposits and longer-term mortgages, which is helping to maintain market activity.
Bryden also noted that house prices have been rising more slowly than incomes for nearly three years, leading to a gradual improvement in affordability.
The Bank of England on Thursday kept its base rate steady at 4%, signalling that inflation may have peaked and could decline in the coming months, raising expectations for future interest rate cuts.
Nonetheless, concerns linger regarding wider economic uncertainties, including a weakening employment market and potential negative impacts from the forthcoming Budget.
Analysts have warned that these factors could dampen buyer confidence and hinder the housing market’s modest recovery.
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