UK house prices climb sharply in October to hit a new £300,000 average

7 November 2025

A view of residential houses in London, Britain, January 23, 2025. REUTERS/Hannah McKay

In a surprising turn for Britain’s housing market, the latest figures from mortgage lender Halifax show that the average UK home price rose by 0.6 percent in October, reversing a 0.3 percent drop in September and marking the strongest monthly rise since January. The new average price of £299,862 reflects not only market resilience but the shifting undercurrents in demand, affordability and regional disparities.

On a year-on-year basis, the housing market recorded a 1.9 percent increase, a rate that outstripped economists’ expectations of around 1.5 percent and the 1.3 percent recorded the previous month. These figures suggest that buyers continue to engage the market even as broader economic and policy challenges loom.

Halifax’s head of mortgages, Amanda Bryden, highlighted that mortgage approvals had recently reached their highest level so far this year, pointing to the underlying demand. She noted that although buyers remain active, the challenge of affordability remains very real. “Demand from buyers has held up well coming into autumn, despite a degree of uncertainty in the market,” she said. “There is no doubt that affordability remains a challenge for many.”

This resurgence in house-price growth comes despite a backdrop of economic caution. Much of the property market has been braced for potential tax changes ahead of the autumn Budget, scheduled for November 26, as well as continued anxiety about borrowing costs and broader household-income pressure. The fact that prices rose at all and at their fastest monthly clip since early in the year suggests that the market may be more robust than some had forecast.

However, the data also highlight sharp regional differences in performance. In London the average annual house-price change slipped to a decline of 0.3 percent, whereas Northern Ireland posted the strongest growth at 8 percent. These divergences reflect geographic shifts in affordability, supply constraints, and local economic conditions which continue to shape the housing narrative across the UK.

Experts say the upside may be partially driven by the anticipation of potential rate cuts by Bank of England after it held interest rates at 4 percent and opened the door to future easing. Lower borrowing costs could reinvigorate buyer interest further but affordability remains the wild card. At a time when many households face elevated living costs and stretched incomes, the hurdle of getting a deposit together or fitting repayments into budgets still looms large.

For buyers and sellers the message is clear: while the headline numbers are encouraging, the experience on the ground may feel far more uneven. Prospective home-owners are seeing prices at record levels, and ratings of affordability suggest many are reaching into smaller deposit sizes or extending mortgage terms to qualify.

From a policy perspective the results may give some relief. The resilience of prices ahead of the Budget suggests that the housing market has managed to absorb the uncertainty about looming taxation and regulatory changes better than expected. Still, the persistent gap between price growth and income growth poses questions about long-term sustainability and who will be left behind.

In many ways the October data underscore a market in transition no longer booming with double-digit annual growth, but also not collapsing under pressure. The fact that price growth picked up after a dip in September speaks to underlying buyer activity and the inertia of housing demand. For regions where supply remains tight and demand continues, the upward stretch may continue; for others, especially where incomes are fragile or tax policy murky, the risk of slowdown remains.

As the market moves into the final stretch of the year, several variables will be key to watch: the response of the Bank of England to inflation and labour-market signals; details of the Budget on November 26 and how they affect housing taxation; regional employment conditions; and mortgage-approval trends. If the next few months mirror the strength of October, then the UK housing market may have found a new equilibrium in the face of headwinds. If not, the resilience shown in October may prove a temporary pause rather than a sustained turn.