UK house prices again fall in three months in September in month-on-month terms and increasing borrowing costs are possible to use “more significant downward pressure” soon, mortgage lender Halifax said on Friday.
House prices fell by 0.1% from August, Halifax said. In yearly terms, house prices were 9.9% higher, the slowest such increase since January.
Kim Kinnaird, director of Halifax mortgages, said a fresh cut to a tax for home-buyers – part of finance minister Kwasi Kwarteng’s “mini-budget” – and the long-standing lack of homes vacant to buy would help to support the market.
But additional increases in interest rates, high inflation and the effect of higher mortgage borrowing costs on affordability “are likely to exert more significant downward pressure on prices in the months ahead,” Kinnaird said.
Kwarteng’s statement of unfunded tax cuts last month has fuelled hopes in financial markets of higher Bank of England interest rates with some economists estimating a fall in house prices before long.
Halifax said London sustained to have the slowest rate of yearly growth in the country with house prices increasing by 8.1% over the last year.
Last week, rival lender Nationwide said UK home prices failed to rise in monthly terms for the first time since July 2021.