Market shows 'further signs of slowing' as house prices fall: Halifax

The annual rate of growth fell further to 9.9%, down from 11.4% in August,returning to single-digits for the first time since January.

As a result, the cost of a typical home edged down a little to £293,835 from the previous month’s record high (£293,992).

There are now four UK nations and regions which have seen annual house price inflation fall to single digit levels: Eastern England, Greater London, the North East and Scotland. 11 out of 12 areas recorded slower growth than in August (the exception being the North East).

Wales remains at to the top of the table for annual house price inflation with a rate of 14.8%, down from 15.8% in the previous month.

The West Midlands has now overtaken the South West to record the strongest rate of annual growth in England, with house prices rising by 13.3% over the last year, down slightly from 13.5% in August.

The pace of annual house price growth in Northern Ireland eased back further last month to 10.9% from 12.5%.

Scotland also saw a further slowdown in the rate of annual house price inflation, to 8.5% from 9.3%.

London still has the slowest rate of annual growth amongst the UK nations and regions, with house prices rising by 8.1% over the last year.

Kim Kinnaird, director of Halifax Mortgages, said: “The events of the last few weeks have led to greater economic uncertainty, however in reality house prices have been largely flat since June, up by around £250. This compares to a rise of more than £10,000 during the previous quarter, suggesting the housing market may have already entered a more sustained period of slower growth.

“Predicting what happens next means making sense of the many variables now at play, and the housing market has consistently defied expectations in recent times. While stamp duty cuts, the short supply of homes for sale and a strong labour market all support house prices, the prospect of interest rates continuing to rise sharply amid the cost of living squeeze, plus the impact in recent weeks of higher mortgage borrowing costs on affordability, are likely to exert more significant downward pressure on house prices in the months ahead.

“This will undoubtedly be a cause of some concern for homeowners, but the unprecedented rate of property price inflation we’ve seen in recent years has been far above the historic average. It’s important to look at slower growth in this context – since the start of the pandemic average property values have risen by around +23% (almost £55,000) with detached house prices up by more than £100,000 over the same period.”

Iain McKenzie, CEO of The Guild of Property Professionals, commented: “Home-buyers are still coming to terms with the sudden leap in fixed-rate mortgages, and it will be some time before we see the full impact.

"Many prospective buyers are rushing purchases through before their approved deal runs out, while others are seeing their hopes of buying fade before their eyes.

"The cooling in house prices seen in these figures is caused by the wider cost-of-living crisis, with energy bills at all-time highs, and inflation hurting many households.

"While getting a good mortgage deal has become significantly harder, a crash in the market is not as likely as some economists are forecasting.

"Estate agents are still seeing stock shortages in many areas of the country, something which has supported elevated house prices throughout the boom.

"The government’s new stamp duty changes will be enticing to first-time buyers on the surface, however, being able to take advantage of the change will largely depend on whether they can secure a mortgage deal.”

Ross Boyd, founder of mortgage comparison platform, Dashly, added: "For the mortgage and property markets, the events of the past fortnight have been like a Freddie Krueger movie. Double-digit annual price growth could be gone for a number of years given the new level mortgage rates are at and the long and protracted recession we are almost certainly on the cusp of. More rate rises, and potentially very sharp ones, are almost certain, and that will significantly reduce demand for property, putting prices under real pressure. Those people who are currently locked into some of the lowest mortgage rates ever will already be hiding behind the sofa as this horror flick plays out. The rate shock will be extreme. The pending remortgage crunch will significantly add to the cost of living crisis and put further pressure on household finances. We are heading into a brutal winter, with confidence among buyers and sellers alike at its lowest level since the Credit Crunch. More than ever, people need to speak to a mortgage broker and get off a lender's SVR, as if fixed rates are at 6%, SVRs could be significantly higher still. The difference could be thousands of pounds in mortgage payments annually."