UK house prices growth accelerated to 2.4% in October from 2.2% the month before, according to data from lender Nationwide Building Society.
Prices rose 0.3% month on month after seasonal adjustment, bringing the average UK house price to £272,226.
The building society said the market has remained broadly stable in recent months, with modest price rises and mortgage approvals at similar levels to those seen before the pandemic.
Robert Gardner, Nationwide’s chief economist, said the slight rise in the annual rate of house price growth followed a modest rising trend in recent months as the number of mortgages approved for house purchase was at similar levels to those prevailing before the pandemic struck.
He added that the market’s resilience comes despite high borrowing costs and weaker consumer confidence. Gardner said affordability could improve if incomes continue to grow faster than house prices and borrowing costs ease further in the coming quarters.
Nationwide’s analysis also highlighted home improvement trends, noting that kitchen and bathroom renovations were the most common projects among homeowners over the past five years.
The data showed that adding an extension or loft conversion with a large bedroom and bathroom could increase a home’s value by up to 24%.
Nationwide produces its monthly House Price Index using data from its mortgage lending at the post-survey approvals stage.
Ryan Etchells, chief commercial officer at specialist mortgage provider Together said there was "a question mark" over whether the increase in house prices can be sustained, with the Bank of England’s August rate having "failed to reignite buyer activity", with mortgage rates not falling much as elevated inflation is seen as delaying further cuts.
He said the newly enacted Renters’ Rights Bill, while strengthening tenant protections, "introduces new costs and legal hurdles for landlords, including the end of Section 21 evictions and tighter rent controls" which may prompt more landlords to exit the buy-to-let market and increase the number of homes for sale, but comes at a time when "many renters still lack the means to buy, so demand may not keep pace with rising supply".
Zoopla recently recorded a drop in buyers and house sales compared to last year, which Etchells said was an early signal that the festive dip may have started already.
"If landlord sell-offs continue, house prices could soften, especially in areas with a large number of private rentals. Still, subdued prices and falling buy-to-let rates offer opportunities for those ready to act".
Economist Matt Swannell at the EY ITEM Club said the first half of the year had seen the housing market distorted by April’s change in Stamp Duty thresholds.
"With transactions brought forward to beat the deadline, there was a lull in activity through the spring, but the effects of this now appear to have faded.
"Mortgage lending and transactions have picked back up, while the recovery in mortgage approvals suggests that so far, pre-Budget uncertainty has not weighed on the market.
"With these one-off effects fading into the background, the housing market’s performance will be driven by fundamental forces like affordability and mortgage rates going forward."
Looking forward to 2026, he said it felt likely that it "will be another year of modest house price growth", as valuations remain stretched, despite pay growth in the past few years.
"Meanwhile, in the near-term, real pay growth looks set to slow as earnings cool and inflation remains sticky."
On the plus side for the housing market, several economists predict that the Bank of England may cut the interest rate again by the end of the year.