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UK house prices reach record high but market set to slow

Average UK house prices have reached a record high following strong demand for properties post lockdown.

UK house prices have hit a record high

Average UK house prices have reached a record high following strong demand for properties post lockdown, but Halifax has said that the market is set to slow down.

Record high UK house prices

Mortgage lender Halifax said house prices in October were 0.3% higher than in September. House prices last month were also 7.5% higher than the year before which signals the strongest growth since June 2016. Managing director at Halifax, Russell Galley, said: “The average UK house price now tops a quarter of a million pounds (£250,457) for the first time in history.

He highlighted recent price growth in the market with a 5.3% gain over the past four months, the strongest since 2006. It’s not all good news though as month-on-month price growth slowed considerably, down to just 0.3% compared to 1.5% in September.

The housing market took a hit in March when it was more or less shut down at the start of the first national lockdown as people were asked to avoid moving and house viewings were brought to a halt. Restrictions were eased in May and Chancellor Rishi Sunak introduced a stamp duty holiday in July. Many estate agents have declared that people want more space to live and work in following the Covid outbreak.

Galley stated: “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% compared to a 6% 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. 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.

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