Property prices dropped by 4.7% in September

This means the typical home in the UK now costs £278,601 – around the level seen in early 2022. Despite this, property prices are still up by one percent since the initial base rate rise in December 2021, while average prices remain more than £39,000 above pre-pandemic levels.  

Broken down, all UK nations and the nine English regions registered a decline in house prices year-on-year. The greatest drop seen was in the south of England, with prices falling by 5.7%. In contrast, Northern Ireland currently has the most resilient set of house prices, with the country only seeing a decline of 0.2% compared to the same period last year.  

Scotland also experienced a modest annual decline of 0.8%, while Wales saw property prices fall by 3.6% over the last year.

London, meanwhile, remains the most expensive place in the UK to purchase a home – with an average property price of £525,678. Despite this, with prices down by 4.8% over the last year, the capital has also seen the biggest fall in price of any region in cash terms, going down by £26,514.

Halifax Mortgages director Kim Kinnaird said: “UK house prices fell further in September, edging down by 0.4% on a monthly basis.  

“This was a sixth consecutive monthly fall, though the pace of decline slowed markedly compared to August (1.8%). The average home now costs £278,601, a drop of around £1,200 since last month. On an annual basis prices are down by 4.7%, largely unchanged from 4.5% in August.  

“Nonetheless they remain some £39,400 higher than in March 2020, such was the extraordinary growth seen during the pandemic. Activity levels continue to look subdued compared to recent years, with industry data showing lower levels of new instructions to sell homes and agreed sales.  

“Borrowing costs are the primary factor, given the impact of higher interest rates on mortgage affordability. Against this backdrop, homeowners inevitably become more realistic about their target selling price, reflecting what has increasingly become a buyer’s market. 

“However, with Base Rate now likely to be at or around its peak, we are seeing fixed rate mortgages deals ease back from recent highs. Wage growth also remains strong, which has helped with affordability, with the house price to income ratio now at its lowest level since June 2020 (6.2 in September vs 6.3 in August). 

“Many economists and financial markets predict that Base Rate will remain higher for longer, with any significant cuts appearing unlikely until inflation gets closer to the Bank of England’s two percent target. Overall, these factors are likely to keep mortgage rates elevated in comparison to recent years, constraining buyer demand and putting downward pressure on house prices into next year.”