Halifax House Price Index September 2023

UK house prices fell 4.7% YoY in September, according to mortgage lender Halifax.
House prices in the south of England are under the most pressure.
Average UK property now costs £278,601, similar to the level seen in early 2022.

Annual rate of growth falls to -4.7%

Source: Halifax, IHS Markit

Key trends

Average UK house prices dropped in September, falling 0.4% MoM, the sixth consecutive monthly fall. However, the pace of decline was significantly slower than August (-1.8%).
The annual rate of house price growth was -4.7%, but prices remain £39,400 than the level seen in March 2020. Prices fell on an annual basis in all regions of the UK.
The South East is facing the most downward pressure, with house prices having fallen by 5.7% on an annual basis to an average of £376,450.
On the other hand, prices in Northern Ireland and Scotland fell by just 0.2% YoY and 0.8% YoY respectively.

Outlook

The latest house price growth figures point to subdued market activity in September.
The primary reason for this is rising borrowing costs arising from consecutive interest rate increases.
However, September also saw the Bank of England decided to hold the Base Rate at 5.25% after fourteen consecutive increases, suggesting uncertainty regarding future rises may ease.
Strong wage growth has also continued to put upward pressure on buyer confidence, with the house price to income ratio at its lowest level since June 2020.
Looking ahead, interest rates are likely to remain high as the Bank of England attempts to bring inflation back down to the 2% target.
Even if rates do not rise further, they remain exceptionally high and will continue to put downward pressure on buyer confidence and house prices in the months to come.