According to the Halifax, October house prices rose for the first time since March. A 1.1 percent monthly gain was much stronger than the market consensus and even followed a slightly smaller revised 0.3 percent drop in September. The increase was enough to put the average price at £281,974, a 3-month high and well above its pre-Covid mark but still down 3.2 percent on the year. The annual inflation rate has been consistently below zero since April.

The quarterly change, the best guide to underlying developments, now stands at minus 1.9 percent, down from minus 1.8 percent in the third quarter and the weakest print since the three months to February. Regionally, prices were again lower on the year across the board with the South East (minus 6.0 percent) continuing to record the steepest annual drop. That said, while tight supply seems to be providing some support for prices, the Halifax also noted that against a backdrop of rising rental prices, the first-time buyer market has held up relatively well.

Still, overall market conditions remain quite subdued and with a recession potentially just around the corner, look likely to stay so for some time even if Bank Rate has topped out. Today's update puts the UK RPI and RPI-P at minus 4 and minus 25 respectively, both measures showing economic activity in general running behind market expectations.

Prices are expected to slip 0.4 percent on the month after a 0.4 percent dip in September.

The Halifax House Price Index (HPI) is the UK's longest running monthly house price measure with data covering the whole country going back to January 1983. The index is based on the largest monthly sample of mortgage data, typically covering around 15,000 house purchases per month, and covers the whole calendar month. In March 2016 Markit announced that it would be acquiring the Halifax HPI from Lloyds Banking Group. Halifax continues to publish the index on behalf of Markit and both the name and the basic methodology remain unchanged. However, in May 2020, the annual growth measure was changed from the average of the last three months to just the latest month.

Home values affect much in the economy - especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can damp housing starts. Changes in home values play key roles in consumer spending and in consumer financial health. During the first half of this decade sharply rising home prices boosted how much home equity households held. In turn, this increased consumers' ability to spend, based on wealth effects and from being able to draw upon expanding home equity lines of credit.