Industry reacts to inflation reaching 11.1% and average house price hitting £295,000

This is the highest annual rate recorded in the National Statistic series, which began in January 1997. 

The CPI including owner occupiers’ housing costs (CPIH) has also gone up to 9.6% in October, compared to 8.8% in September and 8.6% in August. 

According to the ONS, gas and electricity prices made the largest upward contributions to the CPI and CPHI inflation rates — despite the introduction of the government’s Energy Price Guarantee.

Food, non-alcoholic beverages, and transport also contributed greatly to the increase. 

The ONS has also unveiled the latest House Price Index for September, which revealed that UK average house prices increased by 9.5% over the year to September.

The average house price was £295,000 in September — £26,000 higher than this time last year, and unchanged since August.

Industry experts react to latest ONS inflation and house price index figures

This section will be constantly updated throughout the day — check regularly for more comments from industry experts

1:51pm

Dan Boardman-Weston, CEO and chief investment officer at BRI Wealth Management:

“UK inflation accelerated to 11.1% in October, up from 10.1% in September and ahead of consensus expectations of 10.7%.

"The rate of inflation continues to run at multi-decade highs, with the most recent acceleration in inflation caused by gas and electricity bills and food prices.

"The Bank of England remains in a really tricky spot, as they need to raise rates given that inflation is far in excess of their 2% target, but the economy is in a parlous state.

"The Autumn Statement on Thursday is likely to put further pressure on the economy with significant tax hikes expected but this will start reducing the level of inflation in the fullness of time.

"The Government and Bank of England have a difficult balancing act ahead of them and hopefully they will be successful in reducing inflation without causing too much economic pain.

"This looks like a big ask though.”

1:34pm

Tomer Aboody, director at MT Finance:

"Month-on-month house price increases over the past 12 to 15 months have pushed values to record levels, fuelled by a combination of factors including cheap money, stamp duty savings and the need for space.

"Detached and semi-detached houses have seen the biggest increases.

"As we come to terms with a new world of expensive credit and cost of living, a slight reduction in house prices is expected although a crash isn't guaranteed as many buyers are still looking to buy. That, combined with less stock on the market, will keep prices steady."

10:30am

Stuart Law, CEO at Assetz Capital: 

“This month’s ONS data shows that the end of cheap money, combined with the impact of inflation on household incomes, has finally brought the curtain down on the era of record house prices.

"Despite declining values, homeowners are perhaps feeling a little more secure than they might have, with the Government’s return to sound economics stabilising rates and calming mortgage markets over recent weeks.

"This will ultimately shore-up demand and pricing, ensuring that house prices don’t drop as severely as they could have, and could recover more quickly, especially if inflation falls through 2023 as we expect it will. 

“Potentially declining prices will be of interest to buyers who might have given up hope of finding an affordable home over the last few months.

"But, these gains won’t markedly change the affordability challenges in our housing market as increased mortgage rates are likely to outweigh anticipated price corrections.

“The biggest challenges by far face BTL landlords who are seeing asset values decline, while the costs of a BTL mortgage continue to rise, along with property running costs.

"This compounds the financial issues BTL landlords have been struggling with for years, and we will likely see more come out of the sector, reducing rental stock and driving up rents for people already facing financial hardship.

"Property investors can still turn a profit from the rental sector and provide much needed housing, at lower rents for tenants, but this is now far easier to achieve through alternative investment models, such investing in portfolios of housebuilder loans which provide a stable monthly income, without the costs or stress of bricks and mortar.  

“Across the for sale and rental markets, we cannot tackle affordability and access to housing, or boost business growth in the housing sector, if we don’t build more homes. Along with the nation’s housebuilding community, we will be watching to see if tomorrow’s Autumn Statement marries fiscal discipline with a credible approach to supply side reform, both of which are desperately needed to unlock development.

"If investment zones are to be scrapped, we need to know what’s next, and when.

“As we anticipate the arrival of an age of austerity, our focus remains on deploying private capital into the housing market, while creating attractive investment opportunities for private property investors, who are absolutely essential if we want to boost housebuilding and improve affordability and access to housing in challenging times.”

10:25am

Graham Cox, founder of SelfEmployedMortgageHub.com:

“These latest figures make grim, but unsurprising reading.

"Inflation continues to rise sharply and shows no sign of abating, so it's now more likely there will be another hefty base rate rise at next month's Bank of England monetary policy committee meeting. 

"While further rate rises are good news for long-suffering savers, who will finally see a decent return, mortgage rates will only get more expensive next month.

"The level of payment shock next year for those remortgaging will be off the charts.”

10:20am

Jason Tebb, CEO at OnTheMarket.com: 

“This data may be a little historic but shows the continued rebalancing of the market with average house price growth continuing to slow. 

 

"Rising inflation, interest rates and the higher cost of living mean buyers have less buying power, so sellers who don’t price realistically may struggle to generate interest. 

 

"Housing affordability is becoming increasingly stretched yet the aspiration to buy remains for many, particularly those with good mortgage offers who are keen to proceed before they expire.

 

"All eyes will be on the Chancellor’s Autumn Statement to see whether there will be assistance for those aspiring to get on the housing ladder.”

​9:07am

Paul McGerrigan, CEO at Loan.co.uk: 

“The war in Ukraine has taken an alarming turn for the worst and looks further from resolution than ever. The impact on global supply chains and energy pricing will therefore continue to fuel inflation until the UK can reduce dependency.

“Everyone waits in eager anticipation for the Chancellor’s plan and initial decisions. He needs to build confidence in the markets by balancing the books without plunging the UK into a deep and lasting recession — a challenge indeed, but one he seems to want to take head on.

“Carefully considered personal finance decisions particularly in relation to mortgages are critical to help many households navigate the next 12-18 months. All of us who offer property-based borrowing advice need to step up and be there.”

9:05am

Douglas Grant, group CEO at Manx Financial Group: 

“These are eye-watering numbers and signal just how difficult the next few months and beyond are going to be. 

“We believe that demand for working capital will soar even further than the previous levels, as more businesses desperately require liquidity provisions to counteract rising interest rates, supply chain issues, increases in wages and additional cost of living crisis headwinds. 

“Our research recently revealed that over a fifth of UK SMEs that required external finance over the last two years were unable to access it. What’s more, over a quarter have had to stop or pause an area of their business because of a lack of finance. 

“SMEs continue to struggle with accessing finance and, worryingly, this lack of availability is costing them and the UK economy in terms of growth at a time when it is needed the most. 

“The amount of growth that is being sacrificed is significant and will require new solutions which are designed to address this funding gap.”

9:00am

Simon Webb, managing director of capital markets and finance at LiveMore: “The spiralling cost of energy and food are the main components of the high inflation we have today. 

“What is notable about the CPI inflation figure is that it has been calculated using subsidised energy prices, so the 11.1% rate is lower than if there was no energy price cap in place.

“This cap is due to be removed or reviewed in April 2023 but if it is taken away, inflation may well will pick up again — it could be a roller coaster ride for inflation in the next year.”