UK house prices hit record high but rise by least in 3 months, Halifax says
3:28 am Thursday, November 07th, 2024
LONDON (Reuters) -British house prices hit a new record high in October but the 0.2% rise from September was the smallest in three months and demand could remain subdued if interest rates fall only slowly and as taxes on home-buyers go up, mortgage lender Halifax said.
The increase was in line with the median forecast in a Reuters poll of economists.
Compared with October last year prices were 3.9% higher, also the slowest increase since July, when Britain’s Labour Party won power in an election and warned of tough times ahead to fix the economy which hurt consumer confidence.
Halifax said average house prices hit a record high of 293,999 pounds ($380,288), edging past a previous peak of 293,507 in June 2022 when the Bank of England was raising interest rates and shortly before the ‘mini-budget’ crisis which pushed up mortgage rates sharply.
Amanda Bryden, head of mortgages at Halifax, said despite the headwind of higher interest rates, house prices had mostly levelled off since mid-2022, rising by 0.2% over the period.
The possibility of the BoE cutting interest rates more slowly than previously expected and a rise in taxes paid by home-buyers announced in the new government’s first budget last week might affect demand going forward, she said.
“While we expect house prices to keep growing, it will likely be at a modest pace for the rest of this year and into next,” Bryden said.
The BoE is expected to lower its benchmark rate at 1200 GMT on Thursday for only the second time since 2020. But investors are pricing in fewer cuts between now and the end of 2025 after last week’s budget included bigger-than-expected borrowing and spending plans by the government.
($1 = 0.7731 pounds)
(Reporting by William Schomberg;Editing by Catarina Demony)
