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UK house prices grew 0.3% in October but rise could be ‘short-lived’

Nick Cheek
Written By:
Nick Cheek

Average house prices in the UK ticked up 0.3% month-on-month to £296,422.

Figures from the Office for National Statistics (ONS) showed that this was a 12.6% annual increase, an improvement on the 9.9 per cent yearly growth recorded the month before. 

ONS put this down to a £6,000 reduction in house prices between September and October last year after changes were made to the stamp duty holiday. 

Regional outlook

House price growth was strongest in the North East, which saw a 17.3% annual rise to £168,367. It also had the largest monthly increase at 1.9%.  

London reported the slowest annual growth of 6.7% to £541,720 and was the only place to see a monthly decline in prices with a 0.9% fall. 

Most regions in England saw monthly changes of less than 1%, while the East Midlands and East of England reported zero growth in house prices. 

In England overall, house prices rose by 13.2% annually to £316,073 in October. This was a 0.2% uplift on September. 

In Wales, house prices increased by 11.8% year on year and 0.1% monthly to £223,824. Average house prices reached £194,874 in Scotland, a rise of 8.5%, while in Northern Ireland prices increased by 10.7% to £176,131. 

Scott Clay, head of introducers at mortgage provider Together, said the rise in house prices “defied all odds” but warned that “this uplift is likely to be short-lived as a downturn is overdue”. 

Who’s buying?

On average, first-time buyers paid £247,092 for their homes which was a 12.9% annual increase and a 0.3% monthly rise. Former owner occupiers paid £347,117, which was also a 0.3% monthly uplift and 12.3% higher than last year. 

Terraced homes saw the highest increase in price with a 14.1% yearly jump to £242,690. Flats and maisonettes reported the lowest growth in price, with an 8.6% rise to £235,237. 

Property prices on way down 

Paul Holland, mortgage broker at Henchurch Lane Financial Services, said the property market had seen “gargantuan” price growth in the last two to three years adding annual increases of 10% and over were not sustainable. 

Holland added: “When that happens, the wheels invariably come off. Of course, we expect a downturn in prices over the coming 12 months, but this should be viewed more as a correction than anything negative. 

“Unless you purchased at 95% last year and intend to sell quickly, this shouldn’t be viewed as too precarious a situation.” 

Jack Roberts, CEO of home moving platform SlothMove, said: “House prices have flatlined and it won’t take long for them to start their not-so-merry slide downward. When they do fall, the economic headwinds will go far beyond a simple adjustment. 

“We’re already witnessing asking prices being slashed across the country, and these will increase as committed sellers realise swallowing their pride and offering reductions is the only sensible course of action.”