The average UK house price has surpassed £270,000 for the first time, according to the latest Halifax House Price Index.

Annual house price inflation climbed to 8.1% in October, a figure up from 7.4% in September, while price also climbed on a monthly basis by 0.9%. This was the fourth straight month of price rises, the Halifax index revealed.

The figures take the average price of a UK property to a record £270,027. Since the first full month of lockdown in April 2020, Halifax’s index shows the value of the average property has soared by 13.2%, equating to a rise of £31,516.

Halifax managing director, Russell Galley, said that one of the key drivers of activity in the housing market over the past 18 months has been the “race for space”, with buyers seeking larger properties, often further from urban centres.

“First-time buyers, supported by parental deposits, improved mortgage access and low borrowing costs, have also helped to drive price growth in recent months,” said Galley. “First-time buyer annual house price inflation (+9.2%) is now at a five-month high, and has pushed ahead of the equivalent measure for home movers (+8.1%).

“More generally the performance of the economy continues to provide a benign backdrop to housing market activity. The labour market has outperformed expectations through to the end of furlough, with the number of vacancies high and rising relative to the numbers of unemployed.”

Despite the Bank of England declining to increase the base interest rate yesterday, Halifax is still anticipating rates to rise over the next 12 months, and therefore expects house buying demand to cool in the months ahead as borrowing costs increase.

“That said, borrowing costs will still be low by historical standards, and raising a deposit is likely to remain the primary obstacle for many,” added Galley. “The impact on property prices may also be tempered by the continued limited supply of properties available on the market.”

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