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.

Halifax reports that the average home’s price has increased by 8.1% over the past year.  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

Price rise: The average UK property has increased in value by 8.1% in a year, according Halifax

These figures are different because they are based upon the properties Nationwide and Halifax lend mortgages on.

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 of price increases, and the annual increase of 8.1% was the highest since June.

According to the bank, the market was driven by the trend of buyers seeking larger homes and moving from cities to suburban and rural areas. This trend began during the first lockdown.

Russell Galley, Halifax’s managing director, stated that the race for space has been a key driver of activity in the market for housing over the past 18 month. Buyers are looking for larger properties, sometimes further from cities.

He also stated that first-time purchasers are returning to the marketplace in droves after mortgages with small deposits were pulled out of the market because of nervousness on lenders’ part.

He said that house prices for first-time buyers were rising at a faster rate than the average market.

Galley stated that ‘First-time buyers, supported with parental deposits, improved mortgage accessibility and low borrowing costs have also contributed to price growth in the recent months. 

The first-time buyer’s annual house price inflation is at 9.2 percent. This has pushed ahead of the equivalent measure to be taken for home movers, which is at 8.1%.

Yesterday’s vote by the Bank of England’s Monetary Policy Committee to keep the base rate at 0.1% gave a slight boost to the housing market.

This will likely lead to banks offering mortgages with very low interest rates. 

In anticipation of a possible rise in rates, they are increasing rates slightly from their record lows of 0.84 percent. 

This could happen as soon as next month and property experts believe it could cool the housing market. 

House price inflation has remained high for the past year, the index shows

The index shows that house price inflation has remained high over the past year.

Andrew Simmonds (director at Parker’s Estate Agents in Bristol) said that ‘another month, another record-breaking month for the property market. 

Although it won’t disrupt the market, a rise of rates will have an impact on sentiment, even if it is only marginally. It is likely to dampen the enthusiasm of many buyers to spend top dollar on their next home. However, that may not be a bad thing. 

“If I am being honest, we could do without something that takes a bit out of the housing industry.”

Wales experiences the greatest increase

The strongest house price growth has been in Wales. 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 is still the UK’s weakest performing region. 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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