The average UK house price hit a new record high in October, according to Halifax.

The typical property now costs £293,99 - up 0.2% and the fourth monthly increase in a row. On a year-by-year basis, property prices were up 3.9% - but this is down from a 4.6% annual increase in September. The previous record was £293,999, which was recorded by Halifax in June 2022.

It comes as the Bank of England is expected to cut interest rates for the second time this year. The base rate currently sits at 5% and the majority of economists are expecting this to be reduced to 4.75% when the Monetary Policy Committee (MPC) meets this afternoon.

Amanda Bryden, head of mortgages at Halifax, said: "Despite the headwind of higher interest rates, house prices have mostly levelled off over the past two and a half years, recording a 0.2% increase overall. That’s a significant slowdown compared to the 21% rise we saw in the equivalent period from January 2020 to the summer of 2022."

House prices are expected to keep growing at a "modest pace" for the rest of this year and into next, she said. However, Ms Bryden warned that demand could be hampered by changes to stamp duty and the possibility that interest rates may not be cut as quickly as previously expected following the Budget and US election.

She said: "New policies like higher stamp duty for second home buyers and a return to previous thresholds for first-time buyers might also affect demand. While we expect house prices to keep growing, it will likely be at a modest pace for the rest of this year and into next. The potential for a slower pace of interest rate cuts won’t be the news homebuyers will want to hear, particularly as they must also contend with tax rises."

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Alice Haine, a personal finance analyst at Bestinvest by Evelyn Partners, an online investment service, said: "While the UK residential property market enjoyed a post-election resurgence over the summer as affordability concerns eased, the outlook from here is mixed. Mortgage rates may not behave as people hope. Volatile swap rates in the wake of the Budget have been a cause for concern as they raise the risk of borrowing costs edging up."

Full list of average house prices by area

Here are average house prices followed by the annual increase, according to Halifax. The regional annual change figures are based on the most recent three months of approved mortgage transactions.

  • East Midlands, £242,189, 4.4%
  • Eastern England, £333,741, 3.1%
  • London, £543,308, 3.5%
  • North East, £172,730, 4.0%
  • North West, £235,587, 5.9%
  • Northern Ireland, £204,242, 10.2%
  • Scotland, £206,480, 1.9%
  • South East, £387,587, 3.2%
  • South West, £303,362, 3.3%
  • Wales, £225,543, 5.6%
  • West Midlands, £257,287, 4.7%
  • Yorkshire and the Humber, £211,629, 5.3%