House prices have fallen by a marginal 0.1% in the month of September, as the housing market shows more signs of a slowdown. This is according to Halifax’s latest House Price Index, which was released on Friday 7th, covering the month of September. This dip was in comparison to 0.3% growth seen in August. 

Meanwhile, the annual growth rate fell further to 9.9%, which is down from 11.4%. This means the average house price in the UK now sits at £293,835. This report by Halifax showed that annual inflation slowed in all regions but one during September, with the housing market in Wales still staying strong.

Kim Kinnaird, the director of mortgages at Halifax, said ‘the cost of a typical home edged down a little to £293,835, from the previous month’s record high [of] £293,992’. The pace of annual growth also slowed for the third time in a row, from 11.4% to 9.9%’. This means it has returned to single digits for the first time since January. 

The events of the last few weeks, namely Kwasi Kwarteng’s budget announcement and the associated reaction from the public, have led to great economic uncertainty. House prices have been largely flat since June, only up by £250, compared to £10,000 in the previous quarter. This suggests the housing market has already entered a sustained period of slower growth.

Predicting what will happen next demands making sense of the many variables that are at play when the housing market has consistently defied all expectations in recent times. 

Although stamp duty cuts, the short supply of homes and strong labour market all support house prices, in the opposite court we have the prospects of interest rate rises and the cost of living squeeze, which are likely to exert more negative pressure on house prices in the coming months.

This will, no doubt, cause concern for homeowners and estate agents alike, but it should be mentioned that the rate of property inflation we have seen in recent years has been far above the historic averages.