House prices in the UK have dropped by 0.1% in the year to September 2023, down from an increase of 0.8% in August, the Office for National Statistics (ONS) has found.

The latest ONS house price index (HPI) revealed that the average UK house price now stands at £291,000. This is little changed from 12 months ago but is above the recent low in March 2023.

Average house prices dropped in England and Wales by -0.5% and -2.7%, respectively. Prices in the respective nations now stand at £310,000 and £215,000.

However, house prices increased in Scotland over the 12 months to September 2023 by 2.5%, with average prices now standing at £195,000.

The average house price in Northern Ireland also increased by 2.1% in the three months to September, now standing at £180,000.

London remains the most expensive region in the UK to buy a house, with the average price now standing at £537,000. The price dropped by -0.3% between August and September.

The North East continues to be the region with the lowest average house price of all the English regions, standing at £163,000. However, it was the region with the highest annual house price inflation, with average prices increasing by 1.6% in the 12 months to September 2023.

Mortgage expert at Quilter, Karen Noye, said: "UK house prices have dropped half a percent since August, which has now contributed to a house price fall of 0.1% over the year making the average property in the UK valued at £291,000.

"This morning’s lower inflation figure spells good news though for homeowners at least over the long term as lower inflation should hopefully mean that the Bank of England do not have to raise interest rates much further.

"However, the prevailing view is that interest rates will stay higher for longer causing the slump in buyer demand to be prolonged. At present, this has been coupled with sellers unwilling to put their properties on the market meaning that there does remain limited stock stopping any huge price crashes. But as more and more people find that their fixed rate mortgage deals coming to an end push may come to shove and properties will have to be listed. A surge in stock at a time of limited demand will be bound to take the froth out of what has been a turbocharged market over the last few years.

"Once the Bank of England feels confident to start reducing interest rates we should hopefully also see confidence return to the property market. The rental market continues to be incredibly tight which does help keep some demand in the ailing market."

Share Story: