UK house prices hit new high

House prices in the UK reached a record high last month, with the average topping £250,000 for the first time in history.

Latest data from the Halifax, a division of Lloyds Bank, revealed that the average price in October reached £250,457, 7.5 per cent higher than a year earlier - the fastest house price inflation in more than four years.On a monthly basis, the average last month was 0.3 per cent higher than in September. Over the third quarter of the year, prices were up four per cent from Q2.Russell Galley, managing director of the Halifax, said: "Underlying the pace of recent price growth in the market is the 5.3 per cent gain over the past four months, the strongest since 2006. However, month-on-month price growth slowed considerably, down to just 0.3 per cent compared to 1.5 per cent 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 two per cent compared to a six per cent 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."Mr Galley said the level of price inflation was being underpinned by unusually high levels of demand, with latest industry figures showing home-buyer mortgage approvals at their highest level since 2007. Transactions, he said, were being "supercharged" by pent-up demand as a result of the pandemic lockdown and the government's waiver on stamp duty for properties up to £500,000.But he added: "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."Jamie Johnson, CEO of property investment company FJP Investment, said that the market was moving from strength to strength with buyers opting for property investment amid the uncertainty caused by the pandemic."Yet with the country now in a second lockdown, is this momentum about to suddenly run out? I don’t believe so," he added."After all, the stamp duty holiday is still in play and the government has confirmed buyers and renters can still move houses throughout November. Clearly, it understands the importance of the property market in supporting the economy."I anticipate the rate of house price growth to slow down in November, however, it will no doubt continue to remain in positive territory. People are clearly looking to invest in safe and secure assets during this uncertain climate, and real estate has a proven track record of being resilient and quickly recovering from a period of market volatility."Mark Harris, chief executive of mortgage broker SPF Private Clients, commented: "People require more outdoor space and not all flats have roof terraces and balconies. But while Covid is having a massive impact it is likely to be temporary in the scheme of things, with people not able to work from home four days a week forever."Once we have more normality, [employers] will want to see people in the office more. Those flats that are 20 minutes from the workplace will be more appealing than a house on the Dorset coast if you have to be in the office four times a week."

Read more news and views from David Sapsted.

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