Property prices have hit a record high of £270,027 as buyers continue to search for space, according to one of the country’s largest mortgage lenders.
The typical home price has increased 8.1 per cent in the last year, according to Halifax. Since the start of the pandemic, it said prices had risen by £31,500.
It follows a similar pattern to the Nationwide house price index, published earlier this week, which also reported a record high of £250,000.
Price rise: The average UK home has increased in value by 8.1 per cent in a year, says Halifax
The figures differ because they are based on the properties that Halifax and Nationwide lend mortgages on respectively.
Halifax’s index said that the value of the average property grew 0.9 per cent between September and October, an increase of more than £2,500.
It was the fourth consecutive month that prices had increased and the annual rise of 8.1 per cent was the highest recorded since June.
The bank said that the trend of buyers looking for bigger homes and leaving cities for suburban and rural locations, which started during the first lockdown, continued to drive the market.
Russell Galley, managing director at Halifax, said: ‘One of the key drivers of activity in the housing market over the past 18 months has been the race for space, with buyers seeking larger properties, often further from urban centres.’
He also said that first-time buyers were returning to the market in droves, after mortgages with small deposits were pulled from the market due to nervousness on the part of lenders at the start of the pandemic.
House prices for first time buyers, he said, were rising at an even faster rate than the market average.
‘First-time buyers, supported by parental deposits, improved mortgage access and low borrowing costs, have also helped to drive price growth in recent months,’ Galley said.
‘First-time buyer annual house price inflation, at 9.2 per cent, is now at a five-month high, and has pushed ahead of the equivalent measure for home movers at 8.1 per cent.’
The housing market received a slight boost yesterday when the Bank of England’s Monetary Policy Committee voted to keep the base rate at 0.1 per cent.
This will likely result in banks to continuing offering mortgages with extremely low interest rates.
However, they are edging up rates slightly from their previous record lows of as little as 0.84 per cent in anticipation of a possible future rise.
This could happen as early as next month, and property experts have said it could take some of the heat out of the housing market.
House price inflation has remained high for the past year, the index shows
Andrew Simmonds, director at Bristol-based Parker’s Estate Agents, said: ‘Another month, another record high for the property market.
‘Though it won’t scupper the market, a rise in rates will impact sentiment, if only marginally. It’s certainly likely to cool the enthusiasm and excitement of many buyers to pay top dollar for their next home, but that might not be a bad thing.
‘If I am being frank, we could do with something that takes a bit of fizz out of the housing market.’
Wales sees biggest increase
House price growth in Wales have performed the strongest. It saw annual house price inflation of 12.9 per cent in the year to October, pushing the cost of a home up to £198,880.
Northern Ireland has recorded its strongest growth in four months at 11.3 per cent, with an average house price of £169,308.
House prices also continue to rise in Scotland, with the average property now up 8.6 per cent year on year to an average of £190,023.
The North West has seen the biggest house price increases in England at 10.4 per cent, and now has an average house price of £205,881.
London remains by far the weakest performing area of the UK. Prices have risen by just 0.8 per cent in the past year, though at an average of £514,907, property prices in the capital remain well above all other parts of the country.
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