The price of a typical UK home has topped a quarter of million pounds for the first time, according to an index.
The average house price in October was £250,311, marking a 9.9% annual increase and a 0.7% month-on-month uplift, Nationwide Building Society said.
Robert Gardner, Nationwide’s chief economist, said: “The price of a typical UK home has now passed the £250,000 mark, an increase of £30,728 since the pandemic struck in March 2020.”
Mr Gardner said demand for homes has remained strong, despite the expiry of the stamp duty holiday at the end of September.
He continued: “Indeed, mortgage applications remained robust at 72,645 in September, more than 10% above the monthly average recorded in 2019. Combined with a lack of homes on the market, this helps to explain why price growth has remained robust.
“The outlook remains extremely uncertain. If the labour market remains resilient, conditions may stay fairly buoyant in the coming months – especially as the market continues to have momentum and there is scope for ongoing shifts in housing preferences as a result of the pandemic to continue to support activity.
“However, a number of factors suggest the pace of activity may slow. It is still unclear how the wider economy will respond to the withdrawal of Government support measures.
“Consumer confidence has weakened in recent months, partly as a result of a sharp increase in the cost of living.”
Mr Gardner said there has been increased speculation that the Bank of England will increase interest rates in the coming months.
He said: “Investors expect bank rate to be increased from its current record low of 0.1% before the end of the year – most likely to 0.25% or 0.5% – and perhaps reaching 1% within a year, though markets project they will remain close to that level in five years’ time.
“Providing the economy does not weaken significantly, the impact of a limited rise in interest rates on UK households is likely to be modest. This is partly because only a relatively small proportion of borrowers will be directly impacted by any change.