The latest Halifax House Price Index shows that house price growth stumbled as the British summer came to an end, slowing from 3.7 per cent as measured annually last month to 2.5 per cent.
From August to September, house prices went into reverse, dropping by 1.4 per cent. This compares to 0.1 per cent growth on a monthly basis last month, and is the quickest drop since April’s -3.1 per cent figure.
The average house price in the UK is now £225,995.
On a quarterly basis, hour prices are up for the third consecutive three-month block, coming in 1.8 per cent more than in April to June.
Halifax managing director Russell Galley comments: “We are seeing a steadying in house price inflation across these more stable measures [the annual and quarterly growth rates].
“This is set amongst mortgage approvals and completed house sales remaining broadly unchanged, although a gradual pickup in wage growth has helped to support household finances.
“The annual rate of growth is near the top of our forecast range of 0-3 per cent for 2018, as a low supply of new homes and existing properties for sale, combined with historically low mortgage rates and a high employment rate, continue to support house prices.”
Recent figures from the Bank of England show that the number and value of mortgage approvals increased slightly in August, from 65,156 to 66,440, or from £12.3bn to £12.5bn worth.
James Pendleton director Lucy Pendleton says: “September is a month that normally sees a burst of activity as people return from holiday and go back to work.
“A fall of this scale is quite a retreat at a time when increased competition among those racing to move by Christmas would normally give the market a bit of buoyancy.”
Garrington Property Finders managing director Jonathan Hopper adds: “When you’re running on empty, the fuel gauge can flicker wildly – and that’s what’s happening here as a market that’s starved of supply tries and fails to maintain a steady speed.
“While the month-on-month fall in prices looks alarming, this measure is notoriously volatile. Of greater significance is the drop in the annual pace of price growth, which after two briskish months has slowed back to pedestrian.”