UK house prices have risen at their quickest pace since January, according to the latest Halifax House Price Index, as buyer demand remains firm despite ongoing uncertainty over potential tax changes in Rachel Reeves’s upcoming budget.
The average cost of a UK home increased by 0.6% in October, reaching a record high of £299,862. This marks a recovery from September’s 0.3% decline and exceeds economists’ expectations of a modest 0.1% rise. On an annual basis, prices were up 1.9%, also beating forecasts for a 1.5% increase.
“Demand from buyers has held up well coming into autumn, despite a degree of uncertainty in the market,” said Amanda Bryden, head of mortgages at Halifax. “The number of new mortgages being approved recently hit its highest level so far this year.”
Despite the positive figures, affordability continues to weigh on many potential homeowners. Bryden noted that buyers are increasingly turning to smaller deposits and longer mortgage terms to manage high prices.
“Rising costs for everyday essentials are also squeezing disposable incomes, which affects how much people are willing or able to spend on a new property,” she said. “Even so, while there has been some volatility, the market has proven resilient over recent months.”
The uptick in October suggests many buyers have chosen to look beyond the uncertainty surrounding possible tax changes in Reeves’s 26 November budget. Reports earlier this year indicated that the chancellor may replace stamp duty with a new levy on home sales exceeding £500,000.
Industry analysts expect market activity to accelerate once the budget is announced. “October’s property market was noticeably calmer as many buyers have paused to see what the budget might bring,” said Matthew Thompson, head of sales at estate agent Chestertons. “Once there is more clarity from the chancellor’s announcements, we expect buyer activity to pick up as those waiting on the sidelines re-enter the market.”
Bryden agreed that affordability conditions are gradually improving, noting that “house prices have been rising more slowly than incomes for almost three years now.”
In related market news, shares in estate agent Rightmove dropped by as much as 25% on Friday before recovering slightly to close 12% lower. The company warned of a slowdown in profit growth, forecasting operating profit to rise by just 3% to 5% in 2026, compared with 4% to 9% in previous years.
Rightmove said, however, that its investment in artificial intelligence would help deliver “strong business value” and higher long-term growth.
