that the average house price in the UK increased for a fourth consecutive month in October, reaching £270,000 for the first time. This was the result of a 0.9 per cent increase from the previous month, which added more than £2,500 to the value of a typical British home during the 31-day period. A host of factors contributed to this growth in house prices, including low borrowing costs, improved access to mortgage deals and first-time buyers who were largely supported by parents on their deposits.
“One of the key drivers of activity in the housing market over the past 18 months has been the race for space, with buyers seeking larger properties, often further from urban centres,” Russell Galley, the managing director at Halifax, said. “Combined with temporary measures such as the cut to stamp duty, this has helped push the average property price to an all-time high.”
Nevertheless, the banking company believes that the UK housing market will cool down over the months ahead, as it expects the Bank of England to hike interest rates from the current historic low levels, which would increase the borrowing costs for homebuyers.
“With the Bank of England expected to react to building inflation risks by raising rates as soon as next month, and further such rises predicted over the next 12 months, we do expect house-buying demand to cool in the months ahead as borrowing costs increase,” Galley noted.
