House prices leapt by 9.7% year-on-year in October to reach a record high of £205,240 on average, Halifax has reported.
The growth compares with 8.6% in September and marks the biggest annual increase in UK property values since August last year.
The pressure on prices is likely to continue in the coming months, Halifax said, amid strengthening demand for homes and a lack of properties on the market. Property values increased by 1.1% month-on-month in October, reversing a 0.9% decrease in September.
On a quarterly basis, house prices in the three months from August to October were 2.8% higher than between May and July. The quarterly rate of change, which tends to give a good indication of underlying trends, was higher than the 2.5% average quarterly increase seen during the first nine months of the year.
Martin Ellis, Halifax’s housing economist, said: “Improving economic conditions and household finances, together with sustained low mortgage rates, have boosted housing demand during 2015. Strengthening demand is filtering through into higher sales levels although the ongoing shortage of supply is acting as a significant constraint on activity. The imbalance between supply and demand is likely to persist over the coming months, maintaining upward pressure on house prices.”
Halifax pointed to Bank of England figures as an indication that housing market activity was increasing. It said the number of mortgage approvals made to buyers increased by 4% between the second and third quarters of 2015.
