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UK house prices rose in October for the first time since March, amid a shortage of properties available, but remain lower than a year ago.
The latest house price index from Halifax shows that the average house price rose by 1.1% in October, after a 0.3% drop in September. That’s the first monthly increase since March.
That lifted the price of the average house sold to £281,974, an increase of around £3,000 over the month.
But on an annual basis, property prices are now 3.2% lower than a year ago, compared with a 4.5% fall in the year to September, with prices down sharpest in south-east England.
This calming of the market comes as mortgage rates have fallen from their peaks last summer, as UK inflation has fallen back.
Kim Kinnaird, director at Halifax Mortgages, explains that a shortage of properties on the market is supporting prices: “Prospective sellers appear to be taking a cautious attitude, leading to a low supply of homes for sale. This is likely to have strengthened prices in the short term, rather than prices being driven by buyer demand, which remains weak overall. While many people will have seen their income grow through wage rises, higher interest rates and wider affordability pressures continue to be challenges for buyers.
“Across the medium-term, with financial markets not anticipating a decline in the Bank of England’s Base Rate soon, we expect house prices to fall further overall – with a return to growth from 2025.
“The current picture should continue to be seen in the context of the longer-term house price trend as, on average, prices remain around £40,000 above pre-pandemic levels.”
Halifax’s report matches the messages from rival lender Nationwide last week; they also reported a surprise increase in house prices in October.
Borrowers could also benefit from a drop in UK interest rates next year.Last night, the Bank of England’s chief economist, Huw Pill, predicted that rates could start to fall in the middle of 2024.
Wall Street is digesting the collapse of WeWork, the once high-flying startup which filed for Chapter 11 bankruptcy overnight.
The debt-laden company is entering a restructuring support agreement with stakeholders to drastically reduce its existing borrowing, having struggled to recover from the pandemic.
Investors in the UK will have an eye on parliament, where King Charles will lay out the government’s legislative plans for the new parliament.
We’re expecting a new annual system for awarding oil and gas licences, and moves to prioritise motorists.
The agenda
• 7am GMT: Halifax house price report
• 7am GMT: German industrial production
• 8.30am GMT: Eurozone construction PMI
• 10am GMT: Eurozone PPI index of producer price
• 1.30pm GMT: US trade report for September
We’ll be tracking all the main events throughout the day ... |
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