Annual house price growth slowed to 9.5% in the year to September, falling from 13.1% in August, the latest UK House Price Index from the Office for National Statistics (ONS) has revealed.

The latest fall in growth was because UK house prices increased sharply in September 2021, which coincided with changes to the government’s stamp duty holiday.

Month-to-month, house prices remained unchanged between August and September, which also caused the annual percentage change to slow. It means the average UK house price stood at £295,000 in September, a figure is £26,000 higher than the same time last year.

The ONS stated that average house prices were likely “slightly inflated” in September 2021, as buyers in England and Northern Ireland were rushing to complete property purchases before changes to stamp duty cam into effect at the end of September 2021. 

According to the latest data, average house prices have increased over the year by 9.6% to £314,000 in England, and by 10.7% to £176,000 in Northern Ireland. Prices have also increased by 12.9% in the year to September in Wales to now reach £224,000, while they have risen by 7.3% in Scotland to £192,000.

Commenting on the latest ONS index, managing director of mortgages at MPowered Mortgages, Emma Hollingworth, said the figures are a “change in direction” for UK house prices.
 
“However, whilst rising inflation and interest rates have led the market to cool slightly, it remains resilient with mortgage lending still set to rise 4% this year,” Hollingworth added.
 
“Following a period of particular uncertainty caused by the government’s ‘mini-Budget’ in September, lenders are now coming back to the market with a range of products in a bid to understand and meet the requirements of borrowers during what continue to be challenging times.

“Brokers play an essential role in supporting homebuyers, especially through this period, by helping them understand the products available to them, before opting for the one that best suits their needs in both the short and longer term.”

Technical director at Legal & General Surveying Services, Malcolm Webb, said: “Tomorrow’s Budget statement should provide further details on the government’s ambitions for the housing market, but even without further changes, prospective buyers are likely already putting their own finances under the microscope.

“Borrowers will be aiming to investigate all potential options to facilitate such a massive purchase and future-proof it against any unexpected problems or rate hikes. As such, advisers are more important than ever for buyers in the current climate.”

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