LONDON (Reuters) -British house prices increased by a stronger-than-expected 0.6% in monthly terms in October, figures from mortgage lender Halifax showed on Friday. Halifax said house prices were 1.9
UK House Prices Surge in October, Highest Growth Since January
Overview of UK House Price Trends
LONDON (Reuters) -British house prices last month rose at the fastest pace since January, data from mortgage lender Halifax showed on Friday, adding to signs of demand in the property sector ahead of finance minister Rachel Reeves' budget on November 26.
Monthly and Annual Price Changes
House prices increased by 0.6% in monthly terms in October after a 0.3% fall in September to reach a new record of 299,862 pounds ($402,444.79) - well above a 0.1% rise predicted by economists in a Reuters poll and the biggest rise since January.
Regional Variations in House Prices
Halifax said house prices were 1.9% higher than a year earlier, above the 1.5% forecast in the poll, and compared with an annual increase of 1.3% in September.
Impact of Interest Rates on Housing Market
But, Amanda Bryden, head of mortgages at Halifax, warned that affordability challenges for buyers remain.
"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," Bryden said.
"There is no doubt that affordability remains a challenge for many."
The increase in British property prices has been slower this year than in the second half of 2024 as concerns about the economy and the prospect of additional taxes on homes as Reeves readies her budget.
"This provides further encouragement that the housing market has weathered the prospect of tax rises in the budget better than it first appeared. What's more, house prices may get a further boost from lower mortgage rates in the coming months," Ashley Webb, UK economist at Capital Economics, said.
On Thursday, the Bank of England kept interest rates at 4%, but a close vote and signs that Governor Andrew Bailey might soon join those seeking a rate cut boosted the prospect of a cut in December.
Halifax said house prices in London fell by 0.3% from 12 months earlier while the strongest growth was reported in Northern Ireland where prices rose by 8%, Halifax said.
Data from rival mortgage lender Nationwide published last week showed that prices rose by 0.3% in October, pushing annual house price inflation up to 2.4%.
($1 = 0.7451 pounds)
(Reporting by Suban Abdulla; editing by Sarah Young)
