Real estate experts have cautioned that government policies, such as increased stamp duty for second home buyers, could impact demand. According to market data, average house prices hit a new high in October, despite challenges posed by borrowing costs. The average property price rose by 0.2 percent to £293,999 last month, surpassing the previous peak of £293,507 in June 2022.
This marks the fourth consecutive month of price increases, even amidst a challenging economic environment with inflationary pressures and high borrowing costs affecting buyer affordability. Halifax’s data revealed a 3.9 percent annual price growth in October, showing a slight slowdown from September’s 4.6 percent but still indicating strong year-over-year gains.
Amanda Bryden, head of mortgages at Halifax, noted that the recent price increases reflect a period of stability following the rapid growth during the COVID-19 pandemic. She highlighted that despite the current economic climate, house prices have not fallen significantly, even with the challenges of higher interest rates.
The rise in prices is noteworthy given the subdued growth compared to the 21 percent surge seen from January 2020 to mid-2022 when people sought larger homes during the “race for space” phase. Halifax’s report shows a steady price increase of 0.2 percent over the past two-and-a-half years, demonstrating the market’s resilience.
Bryden mentioned that the number of new mortgages agreed recently reached a two-year high, aligning with average mortgage rates dropping steadily since spring. The Bank of England maintained interest rates at 5 percent in September and economists expect a slower rate cut to keep mortgage costs higher for longer.
Government policies like higher stamp duty for second home buyers and changes for first-time buyers could impact demand. Chancellor Rachel Reeves has committed to investing in housing supply and improving the planning system. Regional variations in house price growth were observed with Northern Ireland leading at 10.2 percent annual increase, while London remained the most expensive region with an average property price of £543,308.
According to estate agent group Fine & Country, supply is increasing despite strong housing market activity. Guy Gittins, chief executive of estate agent Foxtons, emphasized the positive outlook for the housing market following the autumn Budget announcement.
Overall, the housing market continues to show strength despite economic challenges and policy changes, with expectations of modest price growth in the coming months. Please rewrite this sentence.
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