The UK housing market is experiencing record-high prices, presenting affordability issues.
- Average UK house prices increased by 0.2% in October, reaching £293,999.
- Mortgage rates are decreasing, yet affordability remains a challenge for buyers.
- The recent Budget may influence housing market dynamics into 2025.
- Experts predict moderate growth in house prices, despite economic pressures.
The latest data from the Halifax House Price Index reveals a notable rise in UK house prices, which have reached an average of £293,999 in October. This represents a 0.2% increase from the previous month and a 3.9% annual rise, surpassing the previous peak from June 2022 during the pandemic boom. Amanda Bryden from Halifax notes this continued growth despite economic challenges.
Despite an increase in mortgage agreements and a drop in average mortgage rates since spring, affordability remains a significant issue. While mortgage rates are now over 160 basis points lower than in summer 2023, borrowing constraints and potential policy changes could limit future growth, according to experts.
The recent government budget could impact the housing market through potential shifts in Stamp Duty costs and funding for affordable homes. Nathan Emerson of Propertymark suggests that these changes might increase market momentum across England and Northern Ireland, while Mark Harris of SPF Private Clients highlights the boost from lower mortgage rates.
Holly Tomlinson from Quilter points out that despite the rise in house prices, budget uncertainty has eased year-on-year price growth. Government measures such as the new 5% Stamp Duty surcharge on second homes aim to curb demand from investors, potentially affecting rental supply.
Tomer Aboody of MT Finance remarks on the current positive market trend due to lower rates and inflation. However, Jeremy Leaf, an estate agent, warns that increased Stamp Duty for second homebuyers has led to renegotiations. Despite these challenges, interest from first-time buyers remains strong, encouraged by competitively priced properties.
Overall, while the UK housing market faces ongoing affordability challenges, cautious optimism remains as experts predict continued moderate growth.
