The average UK house price fell by 0.1% in September as the housing market shows new signs of slowing down.

According to the latest Halifax House Price Index, the monthly decrease in house prices, the second marginal fall over the past three months, follows an increase of 0.3% in August.

It leaves the average UK house price sitting at £293,835 after falling back from last month’s record high of £293,992.

Halifax also reported that the annual rate of house price growth also slowed to 9.9%, down from 11.4% in August, with this figure returning to single digits for the first time since January.

Director at Halifax Mortgages, Kim Kinnaird, said the events of the last few weeks have led to “greater economic uncertainty”, but highlighted that in reality house prices have been “largely flat” since June, having climbed 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,” Kinnaird commented. “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.

“This will undoubtedly be a cause of some concern for homeowners, but the unprecedented rate of property price inflation we’ve seen in recent years has been far above the historic average. It’s important to look at slower growth in this context – since the start of the pandemic average property values have risen by around 23%, almost £55,000, with detached house prices up by more than £100,000 over the same period.”

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