Halifax boss Amanda Bryden says that UK property prices have defied expectations once again this year with buyer confidence boosted by lower mortgage rates and incomes catching up with the consumer price increases.

Record high

The lender’s figures show property prices hit a record high of £298,083 following annual growth of +4.8%, with transaction volumes returning to pre-pandemic levels.

She says: “Demand for mortgages reached its highest level in more than two years, with volumes now back in line with pre-pandemic levels, having trailed by around 20% at the start of the year.

“The uneven availability of properties for sale across the country, relative to demand, also continues to underpin prices. Higher mortgage rates compared to a few years ago may have made some homeowners hesitant to sell, to avoid triggering an immediate increase in their monthly mortgage cost when they move.

“Additionally, new build completions were at their lowest level since 2018, excluding the pandemic lockdown periods.”

There’s no doubt mortgage affordability remains a challenge.”

Looking ahead to 2025, she says: “Despite the positive trends we’ve seen over recent months, there’s no doubt mortgage affordability remains a challenge for many buyers.

“While further cuts to Bank Rate are still on the cards, the pace looks likely to be more gradual than previously anticipated, and many homeowners with older fixed-rate deals ending next year face refinancing at much higher rates.

“But with employment conditions remaining positive, buyer demand should continue to hold up well. We expect modest house price growth in 2025, likely a little lower than this year at up to +3%, along with a further small increase in the number of transactions.”