Halifax’s latest House Price Index showed a 1.3% rise in house prices, a slowdown from the 2% increase recorded in August.
Meanwhile, on a monthly basis, house prices have gone into reverse compared to the 0.2% month-on-month increase seen between July and August.
Although the average house price is edging close to £300,000, first-time buyer prices are much lower. According to Halifax, the average first home costs £236,811 – up 1.7% year-on-year.
Amanda Bryden, head of mortgages, said: “Affordability remains a challenge, but there are signs of improvement. Interest rates have been on a gradual downward path for nearly two years and many of the most competitive fixed rate mortgage deals now offer rates below 4%.
“Combined with strong wage growth – which has outpaced house price inflation for nearly three years – this is giving more prospective buyers the confidence to take the next step. Summer is typically a quieter period for the market, so the recent rise in mortgage approvals to a six-month high is an encouraging sign of underlying demand.”
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She added: “We expect to see a slow but steady climb in property prices through the rest of this year.”
Regional house price picture
Northern Ireland saw the fastest annual property price inflation, with average property values up 6.5% over the past year, down from growth of 7.9% last month and pushing up the value of a typical home to £216,496.
Scotland recorded annual price growth of 4.5% in September to an average of £215,588, while in Wales, property values rose by a modest 1.9% year-on-year to £227,845.
In England, the North East recorded the strongest annual growth, with prices up 4.8% to £180,443, followed by the North West with 3.9% growth.
The South West saw a second consecutive price fall of 0.2%, with prices now at £303,067.
Meanwhile, prices are up only very slightly in London (0.6%) and the South East (0.2%), with the capital being the most expensive part of the UK, with an average property value of £543,497.
Matthew Thompson, head of sales at Chestertons, said: “September has been a challenging month as many buyers paused their decisions ahead of the November Budget. Uncertainty over potential tax changes is holding back activity, but if the announcements bring clarity, confidence could return quickly and create an unusually busy end to the year.”
A survey released this week found that around one in five homeowners were pausing their plans to sell their properties, as the upcoming Budget had raised concerns around rising mortgage rates, stamp duty and potential tax changes.
Jeremy Leaf, North London estate agent and a former Royal Institution of Chartered Surveyors (RICS) residential chair, added: “A fall in listings and buyer numbers is prompting a softening in prices. As Budget day draws closer, so speculation about property tax rises increases – although in our offices, it is not noticeably deterring our motivated buyers and sellers who form the overwhelming majority.
“Both buyers and sellers are negotiating hard and taking their time but few are giving up, especially on house transactions rather than still-overstocked flats.”
