As UK house prices climbed to a record average of $pounds$299,862 in October, the mortgage market remains a key factor for buyers navigating the expensive landscape. The 0.6% monthly price jump, the fastest since January, comes as average fixed mortgage rates continue to hover around the 4% mark.
According to Halifax, these rates are “likely to ease further in the coming months,” which may be encouraging some buyers to act. The bank reported that the number of new mortgages being approved recently hit its highest level all year, suggesting buyers are finding ways to manage the current rate environment.
However, the combination of 4% rates and record-high property prices is creating a significant affordability squeeze. This is forcing many to make compromises, such as opting for smaller deposits or stretching their mortgage terms over a longer period to keep monthly payments manageable.
The high cost of living is adding to the pressure, squeezing disposable incomes and affecting how much buyers can afford to spend on a property. Despite this, the market has proven resilient, rebounding strongly from a dip in September.
While some buyers have reportedly paused to see if the November budget will bring any tax relief, many others are pushing forward, adapting to the “new normal” of higher rates and finding ways to secure a home.