"The annual rate of growth has continued to rise for the third month in succession, rising from 4.0% in September to 4.5% in October."
House prices in the three months to October were 4.5% higher than in the same three months a year earlier - higher than September's figure of 4.0% and the highest growth rate since February, according to the latest Halifax house price index.
House prices between August and October were 2.3% higher than in the previous three months, the fastest price growth since January.
The average price of £225,826 in October is the highest on record and 2.8% higher than in January.
Russell Galley, Managing Director at Halifax Community Bank, said: “The annual rate of growth has continued to rise for the third month in succession, rising from 4.0% in September to 4.5% in October. The average house price is now £225,826 – exceeding last month’s previous high. House prices in the three months to October were 2.3% higher than in the previous quarter, the fastest quarterly increase since January.
“The fact that the supply of new homes and existing properties available for sale remains low, combined with historically low mortgage rates and a high employment rate, continues to support house prices and is likely to do so over the coming months. Increasing pressure on household finances and continuing affordability concerns are some of the factors likely to dampen buyer demand. That said we do not anticipate the Base Rate rise will be a barrier to buying a house.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, added: "With demand for housing outstripping supply, property prices continue to be supported with the annual rate of growth continuing to rise. It helps that mortgage rates remain low, and even though the Bank of England raised base rate last week, there are no signs of them shooting up anytime soon. While psychologically the first base rate rise in ten years may affect people’s decision-making when it comes to moving house, signs are that any further increases will be modest and slow, so unlikely to put the brakes on the market.
"With lenders remaining keen to lend, and signs that some are prepared to absorb rate increases into their margins, borrowers should be able to expect competitive rates for some time to come."