House prices in the UK rose for the fourth consecutive month in October, reaching a record high, according to mortgage lender Halifax. However, it is anticipated that the pace of price increases will moderate due to a combination of slower interest rate cuts by the Bank of England and new government policies that may impact demand.
The monthly increase in house prices was recorded at 0.2 percent from September, aligning with expectations. This follows a 0.3 percent increase in both August and September. On an annual basis, house price inflation eased to 3.9 percent in October, down from 4.6 percent in September, and below the expected growth rate of 4.2 percent. The data revealed that house prices hit a peak of GBP 293,999 in October.
Amanda Bryden, Head of Mortgages at Halifax, highlighted that borrowing constraints continue to be a significant hurdle for many prospective buyers. After the recent Budget announcement, market expectations have shifted, suggesting that the Bank of England might lower interest rates more gradually than previously anticipated, potentially resulting in sustained higher mortgage costs.
Bryden also pointed out that new government measures, such as increased stamp duty for second home buyers and reverting to previous thresholds for first-time buyers, could have an impact on housing demand. While house prices are projected to continue rising, the growth is expected to be modest for the remainder of the year and into the next.
The Bank of England is poised to reduce its benchmark rate by a quarter-point to 4.75 percent later in the day. However, uncertainty about future policy easing has increased following Donald Trump's victory in the US presidential election.
