Property prices dipped slightly in October, but it’s important to keep things in perspective, as they have increased by more than 25% in the last three years.

House prices fell slightly by -0.4% in October, according to Halifax. The lender has reported that annual house price growth dropped from +9.8% to +8.3%. The typical price of a property in the UK is now £292,598. This is down from £293,664 last month.

‘Average house prices fell in October, the third such decrease in the past four months,’ says Kim Kinnaird, Director of Halifax Mortgages. ‘The drop of -0.4% is the sharpest we have seen since February 2021, taking the typical property price to a five-month low of £292,598.

Post-pandemic slowdown

‘While a post-pandemic slowdown was expected, there’s no doubt the housing market received a significant shock as a result of the mini-budget, which saw a sudden acceleration in mortgage rate increases,’ adds Kinnaird. ‘While it is likely that those rates have peaked for now – following the reversal of previously announced fiscal measures – it appears that recent events have encouraged those with existing mortgages to look at their options, and some would-be homebuyers to take a pause.’

However, it’s important to put the slight price drop into perspective. ‘Though the recent period of rapid house price inflation may be at an end, it’s important to keep this in context, with average property prices rising by more than £22,000 in the past 12 months and by almost £60,000 over the last three years,’ adds Kinnaird.

More cautious

Halifax points out that consumers are currently more cautious, and therefore we have seen reduced demand for borrowing. People are concerned about rising living costs and the prospect of tax rises.

There is still, however, a shortage of available properties for sale, and Halifax says this is likely to remain the case.

All regions except the North East experienced weaker annual price inflation during October compared to September. The West Midlands now has the highest annual growth of any UK region at +11.7%, down +13.2% from the previous month.

Wales also saw annual growth slow at +11.7%, a fall from +14.4%. London remains behind other UK regions, with growth of +6.8% over the last 12 months. This is likely to be due to high prices (the average London property costs £551,320).

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