A new report reveals that UK house prices fell at the sharpest pace in almost two years last month as rising mortgage rates and a gloomy economic outlook took their toll.
According to figures released by Halifax, prices fell 0.4pc in October – the third decline in four months. The annual rate of growth fell to 8.3pc from 9.8pc.
The figures echo numbers from Nationwide, which last week said prices fell 0.9pc – the most since the start of the pandemic.
Commenting on these figures, Jonathan Rolande, from the National Association of Property Buyers, said: “Today’s reduction is, in itself, fairly small. It amounts to just over £1000 off an average home, but the reduction follows a 0.1% drop in September and shows we are heading in the wrong direction.
“What really concerns me isn’t this drop itself, but what might lie ahead of us. I fear much worse is to come and that house prices will fall further and faster next month.
“In recent weeks the housing market has been rocked by financial events including the fallout from the mini-budget in September. The mini-budget disaster and led to much higher borrowing rates, but those lucky enough to already have a mortgage in place would have had it honoured at the old, lower rate.
“Today’s figures don’t yet show the true impact and for that we need to wait two or three more months. I’m concerned that these figures could prove to be worse still.”
“Property is still a lot more expensive than it was a year ago – over 8% more in fact but this could be quickly eroded by further monthly falls.
“We are now in danger of seeing those people who bought property during the summer with homes worth less than they paid. Lack of confidence in the market can quickly spiral and price drops can become a self-fulfilling prophecy. I hope that we now have a period of some stability and a measured budget in mid-November that gets the property market back on track.”
Kim Kinnaird, director of Halifax Mortgages, said: “The rising cost of living coupled with already stretched mortgage affordability is expected to continue to weigh on activity levels.
“Economic headwinds point to a much slower period for house prices.”
