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UK house prices rose at the fastest rate last month since January, according to lender Halifax, despite high political uncertainty ahead of the Budget.
Prices rose by 0.6 per cent between September and October, the biggest monthly rise since January, taking the average price to £299,862, a record high, data showed on Friday.
The annual rate of price growth accelerated to 1.9 per cent in October, up from 1.3 per cent in the previous month.
Both figures were higher than a 0.1 per cent month-on-month expansion and a 1.45 per cent annual growth forecast by economists polled by Reuters.
Amanda Bryden, head of mortgages at Halifax, said: “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 figures dispel some concerns that tax rises expected at the autumn Budget on November 26 would hit the housing market. Chancellor Rachel Reeves needs to fix a fiscal hole that economists estimate is between £20bn and £30bn.
Martin Beck, chief economist at WPI Strategy, said: “A rise in Halifax’s house price index in October offered another sign that pre-Budget jitters are doing little to derail the housing market.”
Separate data published last month by the mortgage provider Nationwide also reported house prices rising in October. Figures published by the Bank of England showed that September UK mortgage approvals hit their highest level this year. However, the S&P purchasing manager indices, published on Thursday, showed that sentiment slumped in the construction sector last month, driven by civil engineering.
The annual price growth recorded by Halifax was the highest in Northern Ireland, for which the lender reported a rise of 8 per cent. Price growth was also strong in Scotland and the North East, while prices in London and the South East dipped slightly, falling 0.3 per cent and 0.1 per cent, respectively.
Bryden said affordability “remained a challenge” for many, as borrowing costs were still historically high and inflation was pushing up the cost of everyday essentials, squeezing household finances.
“Even so . . . the market has proven resilient over recent months, as many buyers opt for smaller deposits and longer terms to help make the numbers work,” she added.
