By Key Highlights:
- Average House Price: Reached a record £298,083, up +1.3% month-on-month.
- Annual Growth: Accelerated to +4.8%, the highest annual rate since November 2022.
- Quarterly Growth: Rose by +1.4% over the last three months.
Regional Trends:
- Northern Ireland: Strongest annual growth in the UK, up +6.8% to an average price of £203,131.
- North West (England): Leading English region with +5.9% growth, average price £237,045.
- West Midlands: Prices rose +5.5%, averaging £257,982.
- Scotland: More modest growth of +2.8%, average price £208,957.
- London: Highest average price in the UK at £545,439, annual growth of +3.5%.
Market Dynamics:
- Mortgage Demand: Mortgage approvals rose +3.3% in October (68,303 approvals), up +41.5% year-on-year, signaling improving buyer confidence.
- Housing Activity:
- October Transactions: UK residential transactions reached 100,410, up +9.5% month-on-month and +21.0% year-on-year (seasonally adjusted).
- Quarterly Transactions: Increased by +3.0% compared to the previous quarter.
Insights from Amanda Bryden, Head of Mortgages, Halifax:
- House prices rose for the fifth consecutive month, supported by easing mortgage rates and growing buyer confidence.
- Positive employment trends and expected interest rate reductions are likely to continue supporting demand into 2025. However, affordability challenges remain significant, and economic uncertainties could impact buyer sentiment.
Broader Trends:
- RICS Residential Market Survey (October 2024):
- New buyer enquiries (+12%) and agreed sales (+9%) indicate improving activity.
- New instructions for property sales remain strong, suggesting a balanced market.
Outlook:
- Steady demand driven by supportive employment and interest rate conditions is expected to sustain moderate house price growth in 2025, although affordability constraints may temper the pace of growth.
The report reflects a robust housing market with record prices and strong buyer activity, supported by a positive economic backdrop. However, ongoing affordability challenges and potential economic headwinds will remain key factors shaping the market.
Industry comments:
Gareth Lewis, managing director of specialist lender MT Finance, says: “There’s definitely evidence of positivity in the housing market, with an increase in purchases and activity as well as prices.
“While this is all encouraging, we still have a long way to go before the market is operating at its full potential. What is required is a better balance of supply and demand, boosting transactions and resulting in true values which reflect this activity.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “The market is showing its teeth, despite the extra Budget taxes in particular reducing the likelihood of early cuts in mortgage cuts and prospect of slower wage growth. Demand continues to be strong, particularly for competitively-priced homes in lower-value areas.
“However, investors hit by higher buying costs are proving unwilling or unable to take on typically smaller one- and two-bedroom homes. On the other hand, confirmation that the stamp duty concession will not be extended has given an opportunity to first-time buyers, especially of such properties, to take advantage.
“That has also given a lift to the rest of the market by releasing second-steppers and connecting chains. However, buyers are taking their time before committing as affordability concerns remain.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, says: “The continued increase in average house prices is surprising in light of the affordability challenges and reduced demand in some parts of the country.
“Those areas where there is limited stock to tempt buyers are seeing prices hold firm and indeed rising in some cases. Homes that are well priced and well presented continue to sell relatively quickly. Buyers may pause to assess the financial implications of a purchase but high-demand areas are likely to retain interest into the new year and beyond.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “With the Bank of England Governor suggesting there may be four rate cuts next year, this will bring further cheer to hard-pressed borrowers who are struggling with affordability.
“The Bank of Mum and Dad continues to play a significant role in helping first-time buyers onto the housing ladder. With precious little in the Budget to encourage them, and the stamp duty holiday coming to an end in March 2025, this is not going to get any easier.
“With Swaps continuing to fall, the direction of travel of mortgage rates is downwards although it’s a slow, measured process. Borrowers looking for a mortgage should plan ahead as much as possible and speak to a whole-of-market broker to find the best deal available to them.”
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