UK house prices see fastest growth since January as mortgage approvals rise

The average house price in the UK rose by 0.6% in October, or £1,647, bringing the cost of a typical home up to £299,862.

That marked the biggest monthly rise in UK house prices since January, according to the latest Halifax House Price Index. Annually, prices grew by 1.9%, up from 1.3% year-on-year growth in September.

Halifax also said that mortgage approvals had reached their highest level this year, suggesting resilient demand in the market.

Northern Ireland continued to see the strongest rate of annual house price growth in the UK, with average values climbing 8% over the past year and a typical home now costing £219,646.

Meanwhile, Scotland recorded annual house price growth of 4.4% in October, up to an average of £216,051. In Wales, average prices grew by 2% year-on-year, to a typical value of £229,558.

The North East recorded the highest annual growth rate in England in October, with prices increasing 4.1% to £180,924.

Prices in London edged 0.1% lower in October, though the capital remains the most expensive part of the UK, with average home costing £542,273.

Read more: Bank of England holds interest rates at 4% in knife-edge decision

"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," said Amanda Bryden, head of mortgages at Halifax.

"There is no doubt that affordability remains a challenge for many," she said. "Average fixed mortgage rates are currently around 4% and likely to ease down further, but with property prices at record levels, moving home can feel like a stretch."

Bryden said that many buyers are opting for smaller deposits and longer terms on their mortgages "to help make the numbers work".

"With house prices rising more slowly than incomes for almost three years now, we expect the trend of gradually improving affordability to continue," she added.

These latest figures come after the Bank of England decided on Thursday to keep interest rates on hold at 4%. The central bank's interest rates influences those set by lenders, so this latest decision will have come as a disappointment to mortgage holders hoping for relief on high borrowing costs.

Read more:

Why rising UK inflation will dampen Christmas cheer for many families Best credit card deals of the week Rachel Reeves lays the ground for raising taxes in pre-budget speech

Download the Yahoo Finance app, available for Apple and Android.

View Comments