UK house prices see biggest October rise in six years

·2-min read
UK house prices see biggest October rise in six years. Photo: PA
There were price records in all regions of the UK in October, according to Rightmove. Photo: PA

UK property prices jumped 1.8% in October, continuing their steady upward trend to cost on average £5,983 ($8,220) more than the previous year.

According to Rightmove's monthly house price index the price bump was the biggest rise at this time of year since October 2015.

The market was also in for what Rightmove called a "full house" for the first time since March 2007. There were price records in all regions of the UK and in all property market sectors (first-time buyer, second stepper and top of the ladder).

“This ‘full house’ is an extremely rare event. The stock shortages started after the first lockdown, and they look set to continue with the underlying housing market fundamentals remaining strong, and an additional incentive to buy and fix your mortgage interest rate before a widely expected rate rise," said Tim Bannister, Rightmove’s director of property data.

Strong housing market fundamentals and a window of opportunity to buy before a potential interest rate rise are keeping activity robust despite the end of the stamp duty holiday, Rightmove said.

Read more: UK house prices could surge as fewer properties come on market

The number of sales being agreed was up 15.2% in September, versus 2019’s "normal market" comparison.

The data backed up previous assertions of a slowing supply of new housing stock on the market compared with demand. The number of new properties coming to market rose compared to summer, but not enough to satisfy strong autumn demand from buyers.

Rightmove's October data. Chart: Rightmove
Rightmove's October data. Chart: Rightmove

"Mortgage interest rates are lower than they have ever been before and lenders are keen to lend in a competitive market, with employment and wage growth also robust. The number of sales agreed continue to be strong despite the end of the stamp duty incentives,” said Bannister.

The window is also open for movers who wish to sell and buy again before a likely interest rate rise, which is widely expected as the Bank of England seeks to control resurgent inflation.

Read more: Value of UK homes soars by £1.6tn in five years

In these "full house" market conditions, with many homes being snapped up quickly and sellers having a choice of competing buyers, those buyers who have already sold their own property subject to contract or have nothing to sell will have the most powerful negotiating hand to secure their ideal home.

Estate agents report that owners who are motivated to move are putting their property on the market before they have set their heart on an onward purchase, and once they have sold their own subject to contract their new status as a "power buyer" helps them to secure a suitable property when it comes on the market.

Watch: How much money do I need to buy a house?

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