UK house prices experienced a notable uplift in October 2025, marking the strongest monthly increase since January. The average property value rose by 0.6 percent (£1,647) to reach a record £299,862, while annual growth accelerated to 1.9 percent from 1.3 percent. This rebound reflects a resilient housing market, supported by a steady rise in mortgage approvals and sustained buyer demand despite broader economic uncertainty.

However, affordability pressures persist. With average fixed mortgage rates hovering around 4 percent and living costs remaining high, many households face tighter financial conditions. These constraints are leading some buyers to adjust their expectations, opting for smaller deposits or extending mortgage terms to secure a purchase.

The current trend also signals a slow but steady rebalancing between income and property values. As wages continue to outpace house price growth for nearly three years, affordability is gradually improving. While risks remain from inflation and interest rate volatility, the overall outlook suggests that the housing market is adapting, characterised less by rapid price surges and more by cautious, sustainable growth shaped by changing buyer behaviour and financial pragmatism.

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.