In a remarkable display of resilience, the UK housing market has defied expectations, with property prices reaching unprecedented heights in October 2024. According to data released by Halifax, the nation’s largest mortgage lender, the average cost of a home in the UK now stands at a staggering £293,999 – the highest figure ever recorded.
This impressive 0.2% rise in October marks the fourth consecutive month of house price growth, bringing the annual growth rate to 3.9%. The figures suggest that homebuyers have largely shrugged off concerns about the potential impact of Chancellor Rachel Reeves’s debut budget, which was delivered at the end of the month.
Defying the Odds: Post-Pandemic Housing Boom Persists
Amanda Bryden, head of mortgages at Halifax, expressed surprise at the fact that house prices have not only surpassed the previous record set in June 2022 but have also managed to avoid a significant decline since then. This is particularly noteworthy given the headwinds posed by higher interest rates and economic uncertainty.
Bryden attributes the June 2022 peak to pent-up demand following the pandemic and a “race for space” among buyers seeking larger homes. Despite the challenges that have emerged since then, the market has proven to be remarkably buoyant.
Mortgage Activity on the Rise
In a further sign of the housing market’s strength, Halifax reported that mortgage activity has been improving recently, with the level of mortgages agreed reaching a two-year high. This uptick in activity comes despite the ongoing affordability challenges posed by elevated mortgage rates.
“It’s a testament to the underlying demand for housing that we’re seeing such robust activity in the face of rising borrowing costs,” noted a senior economist at a leading think tank.
Budget Measures May Temper Demand
While the housing market has shown impressive resilience thus far, Bryden cautioned that policies put forward in Chancellor Reeves’s recent budget could affect future demand. The budget included measures such as higher stamp duty for second homebuyers and a return to previous thresholds for first-time buyers.
“Following the budget, markets expect the Bank of England to cut rates more slowly than previously anticipated, which could keep mortgage costs higher for longer,” Bryden explained. “New policies, like higher stamp duty for second homebuyers and a return to previous thresholds for first-time buyers, might also affect demand.”
- Stamp duty on buy-to-let properties and second homes increased from 3% to 5%
- Temporary nil-rate stamp duty threshold reverted to previous levels
- First-time buyer nil-rate threshold decreased from £450,000 to £300,000
- Additional property nil-rate threshold decreased from £250,000 to £125,000
Regional Variations in Price Growth
While house prices have risen across the board, the pace of growth varies significantly by region. Northern Ireland continues to lead the pack, with the average property now costing £204,242 – a remarkable 10.2% increase compared to the previous year.
In England, the North West has seen the strongest price growth, with properties now averaging £235,587, up 5.9% year-on-year. London, meanwhile, has experienced more modest growth, with the average property now fetching £543,308, a 3.5% increase from the previous year.
| Region | Average Price | Annual Growth |
| Northern Ireland | £204,242 | 10.2% |
| North West England | £235,587 | 5.9% |
| London | £543,308 | 3.5% |
A Modest Outlook
Looking ahead, Halifax expects house prices to continue growing, albeit at a more modest pace for the remainder of this year and into next. The lender anticipates that the rate at which mortgage rates will fall may be hindered by the policies outlined in the recent budget.
“While we’re unlikely to see the kind of explosive growth that characterized the immediate post-pandemic period, the underlying fundamentals of the housing market remain strong,” commented a spokesperson for a major property developer. “Demand continues to outstrip supply, and with interest rates expected to stabilize in the coming months, we anticipate a period of steady, if unspectacular, growth.”
As the UK navigates a challenging economic landscape, the housing market has emerged as a beacon of stability. While the future remains uncertain, the resilience demonstrated by property prices in the face of significant headwinds suggests that the sector is well-positioned to weather the storms ahead. For now, at least, the dream of homeownership remains alive and well in the UK – even if it comes at a record-breaking price.
