This is the highest growth rate since August 2014, while one month before in September the three month growth rate was 8.6%.
Between August and October prices were 2.8% higher than the preceding three months (May-July), with the quarterly rate of change increasing from September’s 2.0%.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “The latest year-over-year growth rates of the Nationwide and Land Registry measures are less punchy, at 3.9% in October and 5.3% in September respectively.
“Nonetheless, momentum is clearly returning to the housing market as low mortgage rates, high consumer confidence and strengthening wage growth stimulate demand.
“Banks continue to seek to increase their mortgage loan books, and the Financial Policy Committee’s rules on loan-to-income multiples are still not close to biting. As a result, we think think rapid growth in house prices will be sustained; we expect an 8% jump next year.”
Home sales increased by 4.4% in the three months to September compared to the three months before, while mortgage approval figures saw a 4% increase.
Supply was at a record low again, as new instructions by home sellers declined in September for an eighth successive month which contributed to the stock of homes available for sale remaining at record low levels, based on the Royal Institution of Chartered Surveyors’ monthly report.
Jeremy Leaf, former RICS chairman and north London estate agent, said: “These figures are worrying as they suggest a continuing upwards trend which risks marginalising first-time buyers even further and is therefore not good for the health of the market. There is not enough balance in the housing market and there are still significant barriers to entry, despite lower mortgage rates.
“If prices continue their upwards trend, it doesn’t bode well for those trying to get themselves into a new home early in the New Year. Prices are high and supply low - that imbalance makes life very tricky for buyers. Those looking forward to welcoming in the New Year in a new home might be struggling to achieve this unless they are prepared to pay for it.”
