The average UK house price hit a new high in October, putting it just below £294,000, an index shows.

House prices rose 0.2% in October, the fourth consecutive monthly increase, Halifax reported.

The average house price was £293,999, surpassing a previous high reached in June 2022.

Property values ​​rose 3.9% annually, a slowdown from a 4.6% increase in September.

Amanda Bryden, head of mortgages in Halifax, said: “Average UK house prices increased by 0.2% in October, continuing the positive momentum of recent months.

“The average house price has reached a record high of £293,999, surpassing the previous high of £293,507 set in June 2022, towards the end of the pandemic-era ‘space race’.

“The fact that house prices have reached these highs again in the current economic climate may surprise many, but it is perhaps more remarkable that they did not fall much to begin with.

“Despite the challenges of rising interest rates, house prices have generally stabilized over the past two and a half years, recording an overall increase of 0.2%.

“This is a significant slowdown compared to the 21% increase we saw in the equivalent period from January 2020 to summer 2022.”

Ms Bryden continued: “Despite the affordability challenge, market activity has improved.

“The number of new mortgages granted recently reached its highest level in two years.

“This is consistent with the steady decline in average mortgage rates since the spring.”

Borrowing constraints remain a challenge for many buyers, she said, adding: “New policies such as higher stamp duty for second home buyers and a return to previous thresholds for first-time buyers could also affect demand.

“While we expect house prices to continue to grow, it will likely be at a modest pace for the remainder of this year and next year.”

“The possibility of a slower pace of interest rate cuts won’t be the news buyers want to hear, especially as they also face tax rises.

She added: “Mortgage rates might not behave the way people hope. The volatility in swap rates following the budget is a cause for concern as it increases the risk of an uptick in borrowing costs.

Mark Harris, managing director of mortgage broker SPF Private Clients, said: “The property market has been significantly supported by falling mortgage rates, leading to more interest from potential buyers and increased activity.

“Since UK government bond yields rose immediately after the Budget, this has had an effect on the swap rates which underpin mortgage pricing, providing an indicator of changes in interest rates .

“With the exception of a few lenders who purchased swaps ahead of the budget, mortgage prices increased slightly. »

Guy Gittins, chief executive of estate agent Foxtons, said of the house price index: “A fourth consecutive month of positive growth demonstrates the current strength of the UK property market and now that the dust has settled on last week’s fall budget, the outlook continues. be very positive.

Nicky Stevenson, managing director of estate agent group Fine & Country, said: “We are in a buyer’s market at the moment,” adding that the increase in the number of properties available, as well as affordability issues, ” means that sellers must remain competitive, as offers are generally lower than asking prices.

Iain McKenzie, chief executive of the Guild of Property Professionals, said: “Our members are reporting healthy levels of housing supply, meaning that even if prices reach a new high, they are still under control and do not require not people to put aside their dreams. accession to property. »

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “The fact that property has reached a new high means some will struggle to be affordable. Worse yet, new mortgages are becoming slightly more expensive.

“The budget did not impress the bond markets, given the level of borrowing taken into account by the government. This has driven down bond prices, which automatically drives up yields and makes mortgages more expensive.

Tom Bill, head of UK residential research at Knight Frank, said: “The interest rate landscape has become more unfavorable than a fortnight ago, which will increase downward pressure on real estate prices in the short term. »

Here are the average house prices followed by the annual increase, according to Halifax (regional annual change figures are based on the last three months of approved mortgage transactions):

East Midlands, £242,189, 4.4%

East of England, £333,741, 3.1%

London, £543,308, 3.5%

North East, £172,730, 4.0%

North West, £235,587, 5.9%

Northern Ireland, £204,242, 10.2%

Scotland, £206,480, 1.9%

South East, £387,587, 3.2%

South West, £303,362, 3.3%

Wales, £225,543, 5.6%

West Midlands, £257,287, 4.7%

Yorkshire and Humber, £211,629, 5.3%