House prices hit new record high of nearly £300,000 says Halifax, as values rise at fastest pace since January

House prices have hit a new record high after the biggest monthly jump since January, according to latest figures from Halifax.

It revealed the value of the average home in Britain rose by £1,647, the equivalent of 0.6 per cent in October.

It says this is the fourth time in the last five months the average price has increased. 

It means the typical property is now fetching £299,862 – the highest on record, according to the lender. 

Annually, the average property is up 1.9 per cent, a jump from the 1.3 per cent recorded last month.

Home loan approvals have reached the highest level this year, according to Halifax. Amanda Bryden, head of mortgages at the bank says this suggests people still have a strong appetite to buy and move home.

Still going up: This is the fourth time in last five months that the average price has increased, according to Halifax

She says: ‘Demand from buyers has held up well coming into autumn, despite a degree of uncertainty in the market, with the number of new mortgages being approved recently hitting its highest level so far this year.’

‘The market has proven resilient over recent months, as many buyers opt for smaller deposits and longer terms to help make the numbers work. 

‘With house prices rising more slowly than incomes for almost three years now, we expect the trend of gradually improving affordability to continue.’

Mortgage are rates falling

Buyers are likely being emboldened by the types of mortgage deals currently available.

Mortgage rates have been falling in recent weeks on predictions of a December rate cut.

HSBC, Barclays, NatWest, Halifax, Santander and Nationwide Building Society have all cut rates over the past fortnight; some more than once.

The cheapest two-year fix for someone moving home with a 40 per cent deposit is currently 3.64 per cent, while the cheapest five-year fix is 3.89 per cent.

Someone buying with a 20 per cent deposit can get a rate as low as 3.88 per cent, while those buying with a 10 per cent deposit can get as low as 4.12 per cent. 

On a £200,000 mortgage being repaid over a 25 year repayment term, a 4.12 per cent rate would equate to paying £1,069 a month.

However, Tom Bill, head of research at Knight Frank says that the recent rate cuts may be countered by the feared tax rises coming in the Budget later this month.

In particular, an income tax rise is rumoured to be on the cards as Rachel desperately tried to bring the nation’s finances under control.

Stable mortgage rates have supported demand in recent months and the bank rate is now on a downward path,’ said Tom Bill.

‘But a tax-raising Budget will curb buying power and weigh on sentiment, keeping a lid on housing market activity next year.’

North-South divide chasm is closing

Prices in the north of England and Scotland continue to move upwards, with almost no loss of momentum.

The average property in the North East of England is 4.1 per cent higher than a year ago while prices in Scotland are up 4.4 per cent. 

Meanwhile, average prices in London have settled into a pattern of steady decline. 

Across the capital as a whole they fell by 0.3 per cent in the year to October, but in prime areas the falls are sharper.

Meanwhile average prices in the commuter belt have slipped into near stagnation – up just 0.1 per cent across the South East over the past year.

Buying agent Jonathan Hopper, chief executive of Garrington Property Finders says that Budget fears are having a more acute impact on the housing market in the south.

‘The reason for this growing divergence between north and south is that amid all the uncertainty about what property taxes this month’s Budget might hold, said Hopper. 

‘One thing is clear – the pain will fall disproportionately on higher value homes and this puts the southeast of England squarely in the Chancellor’s firing line. The ‘broadest shoulders’ are braced for impact.

‘This is driving down prices and has had a chilling effect on the number of transactions, but it hasn’t stopped them entirely.

He added: ‘This is a market that feels suspended between confidence and caution. Every move is tactical, every deal is hard-fought, and sentiment is fragile.

‘The Budget will decide whether the pent-up demand is unleashed or throttled.’