HOUSE THAT: House prices remain high across the UK despite the registered fall (Photo by PA)
Following 18 months of record-breaking rises, the property market is now on a downward spiral, registering a third month-on-month drop in house prices.
According to the latest Halifax’s House Price Index report, house prices in the UK fell by 0.4 per cent in October. It is the third decrease in the past four months, meaning the typical UK property now costs £292,598 – a reduction of £1,066 down from £293,664 last month.
Halifax data showed that the growth rate slowed to 8.3 per cent, from 9.8 per cent in September. However, prices are still up on a yearly basis, with the average property worth £22,350 more compared to the same month in 2021.
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All English regions with the exception of the North East experienced weaker annual price inflation during October compared to September. Similar trends were seen across Wales, Scotland and Northern Ireland.
The West Midlands now has the joint highest annual growth of any UK region at 11.7 per cent (average property price of £254,962) down from 13.2 per cent the previous month. Wales saw an annual growth of 11.7%, down from 14.4%, meaning the average house will cost £222,852.
Scotland has also seen its pace of annual house price inflation slow to 7.5 per cent (from 8.3 per cent) with a typical property now costing £203,820. House prices in Northern Ireland are up 9.5 per cent year-on-year, easing back from 10.9 per cent last month, with an average house costing £184,440.
The pace of annual property price inflation also slowed in London, which continues to lag behind the other UK regions and nations. House prices have risen 6.8 per cent over the last 12 months, however, given the cost of the capital’s average property (£551,320), London still recorded the biggest cash increase of any UK region over the past.
The banking giant said some slowdown was expected after a house price boom during the coronavirus pandemic. Kim Kinnaird, director of Halifax Mortgages, said: “The drop of 0.4% is the sharpest we have seen since February 2021, taking the typical property price to a five-month low of £292,598.
“Though the recent period of rapid house price inflation may now be at an end, it’s important to keep this in context, with average property prices rising more than £22,000 in the past 12 months, and by almost £60,000 (25.7%) over the last three years. While a post-pandemic slowdown was expected, there’s no doubt the housing market received a significant shock as a result of the mini-budget, which saw a sudden acceleration in mortgage rate increases.
All English regions with the exception of the North East experienced weaker annual price inflation (Photo by PA)
“While it is likely that those rates have peaked for now – following the reversal of previously announced fiscal measures – it appears that recent events have encouraged those with existing mortgages to look at their options, and some would-be homebuyers to take a pause. Understandably we have also seen consumer caution grow as industry data shows mortgage approvals and demand for borrowing declining.
“The rising cost of living coupled with already stretched mortgage affordability is expected to continue to weigh on activity levels. With tax rises and spending cuts expected in the autumn statement, economic headwinds point to a much slower period for house prices.”
How it compares in each region
Here are average house prices in October, according to Halifax, followed by the annual price increase:
– East Midlands, £244,842, 10.5%
– Eastern England, £340,607, 8.4%
– London, £551,320, 6.8%
– North East, £172,337, 10.3%
– North West, £229,762, 11.4%
– Northern Ireland, £184,440, 9.5%
– Scotland, £203,820, 7.5%
– South East, £399,080, 9.1%
– South West, £310,737, 10.8%
– Wales, £222,852, 11.7%
– West Midlands, £254,962, 11.7%
– Yorkshire and the Humber, £208,717, 11.0%
By Vicky Shaw, PA Personal Finance Correspondent
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