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Halifax: House prices fell in September as buyers ‘pause for breath’

Is the property market starting to turn? House prices fell in September as buyers ‘paused for breath’ – put off by uncertainty and rising interest rates

  •  House prices fell 0.1% in September mont-on-month, according to Halifax
  • A typical UK property now costs £293,835  down from £293,992
  • Annual rate of growth fell to 9.9% in September down from 11.4% in August 

 House prices fell slightly in September as property inflation dropped back into single digits, according to Britain’s biggest mortgage lender.

Prices dipped by 0.1 per cent in September compared to rising 0.3 per cent in August, according to Halifax’s latest house price index. As a result, a typical UK property now costs £293,835 down from the previous month’s record high of £293,992.

Annual house price inflation also eased to 9.9 per cent in September, down from 11.4 per cent in August.

Although monthly figures are volatile, the dip will be seized on by many as an early sign that the property market is starting to turn and slow down in the face of rapidly rising mortgage rates. 

The housing market showed signs of a slowdown in September as the rate of price inflation dropped to 9.9% 

Kim Kinnaird, Director, 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.’

The average hosue price in the UK dipped in September to £293,835 but prices have remained relatively flat since summer

The average hosue price in the UK dipped in September to £293,835 but prices have remained relatively flat since summer

Over the quarter house prices rose just 1.3 per cent in the UK.

Wales saw the strongest growth of any region in the UK with house prices increasing 14.8 per cent in September, down from 15.8 per cent in the previous month. The region has an average property cost of £224,490. 

Jeremy Leaf north London estate agent and a former RICS residential chairman, said: ‘New buyers are pausing for breath while they consider the likely pace and size of future interest rate hikes, so activity is reducing. 

New buyers are pausing for breath while they consider the likely pace and size of future interest rate hikes 

‘The question is whether worries about rising mortgage payments outweigh the benefits of the recent stamp duty reduction, particularly for first-time buyers.

‘The mini Budget sparked a chain reaction of unintended consequences raising buyer concerns that any savings in stamp duty and other taxes would be more than offset by mortgage rates rising much more quickly and higher than expected.’

What to do if you need a mortgage 

Borrowers who need to find a mortgage because their current fixed rate deal is coming to an end, or because they have agreed a house purchase, have been urged to act but not to panic.

Banks and building societies are still lending and mortgages are still on offer with applications being accepted. 

Rates are changing rapidly, however, and there is no guarantee that deals will last and not be replaced with mortgages charging higher rates. 

This is Money’s best mortgage rates calculator powered by L&C can show you deals that match your mortgage and property value

What if I need to remortgage? 

Borrowers should compare rates and speak to a mortgage broker and be prepared to act to secure a rate. 

Anyone with a fixed rate deal ending within the next six to nine months, should look into how much it would cost them to remortgage now – and consider locking into a new deal. 

Most mortgage deals allow fees to be added the loan and they are then only charged when it is taken out. By doing this, borrowers can secure a rate without paying expensive arrangement fees.

What if I am buying a home? 

Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be. 

Home buyers should beware overstretching themselves and be prepared for the possibility that house prices may fall from their current high levels, due to  higher mortgage rates limiting people’s borrowing ability.

How to compare mortgage costs 

The best way to compare mortgage costs and find the right deal for you is to speak to a good broker.

You can use our best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs.

Be aware that rates can change quickly, however, and so the advice is that if you need a mortgage to compare rates and then speak to a broker as soon as possible, so they can help you find the right mortgage for you.

> Check the best fixed rate mortgages you could apply for 

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