Halifax HPI shows average house prices at record high: "Symbolic £300,000 level could be broken before the year end”

AVERAGE house prices are at a record high with experts saying the symbolic £300,000 level could be broken “before the year end”.

House prices increased by 0.3% in August, marking a third consecutive monthly rise, the Halifax House Price Index showed.

The average property price is now £299,331 – a new record high – while the annual rate of growth eases slightly to 2.2%, down from 2.5% in July.

Though the average price paid by first-time buyers fell slightly as affordability improves.

The typical first-time buyer property now costs £237,577, down by 0.6% since May.

Babek Ismayil, Founder at home-buying platform OneDome, said he expected average house prices to break £300,000 by the end of the year.

He said: “Average prices are closing in on the symbolic £300,000 level and may break it before the year end. Prices rose again in August but the annual rate of growth slowed. 

"With inflation rising to 3.8% and the interest rate vote so close in August, only narrowly delivering a cut, the chances of another reduction in the base rate this year are now much reduced. Mortgage rates have been edging up slightly in recent weeks, too, which could see buyer and seller confidence plateau.”

Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.uk, said she worries about the effect of the Autumn Budget.

She added: “Average property prices are now a hair's breadth away from £300,000. August was much busier than usual in our experience, with buyers very much in the driving seat and negotiating hard on price. 

"September usually sees an uptick in demand and activity, as the school holidays come to an end, but with the Autumn Budget looming, it could be a quieter Autumn than usual. Many people may decide to sit on their hands and see what the Budget delivers before making any major decisions about buying or selling a home.”

Andrew Montlake, CEO at London-based Coreco, said he expected demand to increase in September.

He added: "Stable rather than stellar is probably a good description of the property market at present. Demand was reasonable in August following the base rate cut, although swap rates have nudged up since with a few lenders also repricing upwards slightly. 

"September usually sees an uptick in demand, but it's hard to know how the looming Budget could impact confidence. What we do know is that the property market is highly resilient and very good at weathering storms."

Daniel Hobbs, CEO at Rayleigh-based New Leaf Distribution, added: “A slow and steady rise in prices seems like a fair assessment of the market between now and the end of the year. Prices will continue to be supported by an ongoing lack of supply as we are simply not building enough homes. 

"The Autumn Budget could see many prospective buyers wait and see before committing to what, for many, is their biggest purchase.”