UK House Prices Reach All-Time High After 1.3% Increase – Mortgage Rate Hikes Loom for Millions

House prices in the UK have risen for the fifth consecutive month, reaching a new record high of £298,083, according to Halifax. November saw a 1.3% increase in property values, the largest monthly gain this year, with annual growth accelerating to 4.8%, the highest since November 2022.

However, the Bank of England warns that approximately 4.4 million UK households could face rising mortgage payments over the next three years. Around 420,000 households may see monthly repayments increase by £500, while over a million others face a second rate hike since interest rates began climbing in late 2021.

Karen Noye, a mortgage expert at Quilter, noted that the uptick in house prices reflects a rebound in buyer activity driven by falling mortgage rates and improved market stability. Yet, affordability challenges persist, especially for first-time buyers dealing with high borrowing costs and larger deposit requirements.

Looking ahead, property prices are expected to rise further before April 2024, when the current stamp duty relief ends. The looming deadline has prompted urgency among buyers, particularly first-time purchasers hoping to secure properties before tax thresholds revert to previous levels.

Jonathan Hopper, CEO of Garrington Property Finders, described this trend as a potential “Stamp Duty stampede,” with buyers making rushed decisions and higher offers. However, analysts predict a more subdued market after April 1, as buyers opt for cheaper homes or negotiate harder to offset increased costs.

Alice Haine, Personal Finance Analyst at Bestinvest, highlighted the challenges posed by rising living costs, tax hikes, and inflation, noting that affordability pressures are unlikely to ease soon.