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UK house prices rise for first time since March

UK house prices rose last month after six monthly falls as sellers were cautious, leading to a shortage of homes on the market.

The average price of a property rose to £281,974 in October, up 1.1% from September, an increase of almost £3,000 and the first time prices have gone up since March, according to the mortgage lender Halifax. Compared with October last year, prices fell 3.2%, smaller than the annual decline of 4.5% in September.

Kim Kinnaird, the director of Halifax Mortgages, said: “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 driven by buyer demand, which remains weak overall.

She added: “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.”

Jeremy Leaf, a north London estate agent and a former Rics residential chair said: “We are not getting carried away with the modest rise in prices shown here. Transactions remain subdued, so looking forward, we don’t expect to see much improvement in the market until January or February of next year at the earliest.”

South-east England continues to experience the largest annual decline in house prices, down 6%, while London still has the highest average house price in the UK, at £524,057, falling 4.6% over the last year. In Scotland, prices edged down 0.2% annually to an average of £202,608.

Last week, the Bank of England left interest rates unchanged at 5.25% for a second consecutive meeting, the highest level since the 2008 financial crisis. It warned the economy would be on the brink of recession in the coming year, and signalled interest rates are likely to stay high for a prolonged period as it tries to tackle stubborn inflationary pressures.

The likely end of Bank of England rate rises has translated into a modest dip in mortgage costs. The average two-year fixed residential mortgage rate fell to 6.26% on Tuesday from 6.29% on Monday, while the average five-year fix edged down to 5.84% from 5.87%, according to Moneyfacts.

Halifax expects house prices to fall further overall, and to return to growth from 2025.

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