Halifax: House prices fell in September as buyers paused for breath

Is the real estate market beginning to shift? Home prices fell in September as buyers “paused for breath” – due to uncertainty and rising interest rates

  • House prices fell 0.1% in September on a monthly basis, according to Halifax
  • The typical property in the UK now costs £293,835, down from £293,992.
  • The annual growth rate fell to 9.9% in September, down from 11.4% in August

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

Prices fell 0.1 percent in September, compared with a 0.3 percent rise in August, according to the latest Halifax House Price Index. As a result, the cost of a typical property in the UK is now £293,835, down from the previous month’s high of £293,992.

Annual house price inflation eased to 9.9 percent in September, down from 11.4 percent in August.

Although the monthly numbers are choppy, many will seize on this decline as an early sign that the real estate market is beginning to turn around and slow in the face of rapidly increasing mortgage rates.

The housing market showed signs of slowing down in September as price inflation fell to 9.9%.

The housing market showed signs of slowing down in September as price inflation fell to 9.9%.

Kim Kinnaird, director of Halifax Mortgages, said: ‘The events of the past few weeks have created greater economic uncertainty, but in fact house prices have been largely flat since June, up by about £250.

This compares with a rise of more than £10,000 during the previous quarter, suggesting that the housing market may have already entered a more sustainable period of slower growth.

Anticipating what will happen next means understanding the many variables that are out there now, and the housing market has consistently defied expectations in recent times.

While stamp duty cuts, a short supply of homes for sale and a strong job market are all supporting home prices, the likelihood of interest rates continuing to rise sharply amid cost-of-living pressure, plus the impact in recent weeks of rising mortgage borrowing costs. In terms of affordability, it is likely to put more downward pressure on home prices in the coming months.

Slowing growth: The median UK house price fell in September to £293,835, according to the latest Halifax Index, but prices have held relatively flat since the summer

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

In the quarter, house prices increased by just 1.3 per cent in the UK.

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

Jeremy Leaf, North London estate agent and former RICS Chairman, said: ‘New buyers pause to catch a breath while they contemplate the potential pace and size of future rate hikes, so activity is down.

New buyers pause for a breath while they consider the potential pace and size of interest rate hikes in the future

The question is whether concerns about rising mortgage payments outweigh the benefits of the recent cut in stamp duty, especially for first-time buyers.

“The mini-budget triggered a chain reaction of unintended consequences raising buyer fears that any savings in stamp duty and other taxes would be offset by mortgage rates rising much more quickly and higher than expected.”

Tom Bell, Head of UK Residential Research at Knight Frank, commented: “It’s a fairly safe bet that UK house prices have now peaked.

The impact of rising mortgage rates will start to affect the strength of demand and spending in the coming months, which we believe will drive UK rates down 10% over the next two years.

What to do if you need a mortgage

Borrowers who need to find a mortgage because their existing fixed-rate deal is coming to an end, or because they’ve agreed to buy a home, are urged to act but not panic..

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

However, rates change quickly, and there is no guarantee that deals will stick and won’t be replaced by mortgages that charge higher rates.

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

What if I need to re-travel?

Borrowers should compare rates, talk to a mortgage broker, and be prepared to work to secure a rate.

Anyone with a fixed-rate deal that expires within the next six to nine months should consider how much a remortgage will cost now — and consider a new deal.

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

What if I’m buying a house?

Those who have agreed to buy homes should also aim to lock in prices as early as possible, so they know exactly what their monthly payments will be.

Homebuyers should beware of overexerting themselves and be prepared for the possibility of home prices falling from their current high levels, due to high mortgage rates limiting people’s ability to borrow.

How to compare mortgage costs

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

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

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

> Check out the best fixed rate mortgages you can apply for


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