House prices in October were 7.5% higher than in the same month a year earlier – the strongest growth since June 2016, according to the latest Halifax House Price Index.
House prices in October were 0.3% higher than in September, and in the period from August to October, house prices were 4.0% higher than the preceding quarter (May to July).
Russell Galley, managing director at Halifax, said: “The average UK house price now tops a quarter of a million pounds (£250,547) for the first time in history, as annual house price inflation rose to 7.5% in October, its highest rate since mid-2016.
“Underlying the pace of recent price growth in the market is the 5.3% gain over the past four months, the strongest since 2006.
“However, month-on-month price growth slowed considerably, down to just 0.3% compared to 1.5% in September.
“Overall we saw a broad continuation of recent trends with the market still predominantly being driven by home-mover demand for larger houses.
“Since March, flat prices are up by 2.0% compared to a 6.0% increase for a typical detached property.
“In cash terms that equates to a £2,883 increase for flats compared to a £27,371 rise for detached houses.
“This level of price inflation is underpinned by unusually high levels of demand, with latest industry figures showing home-buyer mortgage approvals at their highest level since 2007, as transaction levels continue to be supercharged by pent-up demand as a result of the spring/summer lockdown, as well as the Chancellor’s waiver on stamp duty for properties up to £500,000.
“While Government support measures have undoubtedly helped to delay the expected downturn in the housing market, they will not continue indefinitely and, as we move through autumn and into winter, the macroeconomic landscape in the UK remains highly uncertain.
“Though the renewed lockdown is set to be less restrictive than earlier this year, it bears out that the country’s struggle with COVID-19 is far from over.
“With a number of clear headwinds facing the housing market, we expect to see greater downward pressure on house prices as we move into 2021.”