Over the year and month, growth is 0.0% according to the House Price Index which shows the average UK property is now £298,441.
Despite this lack of growth, Andrew Assam, mortgage director at Lloyd’s, said property prices had remained “resilient” during these times of rising mortgage rates.
In fact, Moneyfactscompare.co.uk revealed this week that mortgage interest rates averaged 6% on Monday, and there were only a handful of deals for less than 5% in the market.
Assam said: “Although the overall market has been fairly weak, property prices have so far proven resilient during a period of rising mortgage rates, which has been driven by changing expectations about the future path of the base rate. This is reflected in the broader economic data, with household spending holding up better than many expected despite energy and other cost pressures resulting from the conflict in the Middle East.
“The persistence of this picture will likely depend on how confident consumers are that recent cost-of-living pressures will be temporary.
“Confidence has been a key driver of housing market activity, and will play an important role in shaping demand over the remainder of this year and into 2027.”
First time buyers – what are the expectations?
The latest Halifax house price report took a deeper look at how the market is performing for those looking to take the first step on the property ladder.
It said the average property price for a first-time buyer in the UK in September was £236,779, up slightly from £236,568 in August. This is below the record level of £241,244 reached in February.
The report looked at new measures, such as the government’s recently announced ‘Your First Home’ scheme, and highlighted the “increasing availability” of low-deposit mortgage products from lenders.
This could help more aspiring homeowners take their first step on the property ladder sooner, Halifax reported.
Your First Home provides a title loan to help reduce the cost of the mortgage for first-time buyers purchasing new construction. Qualified buyers will only need a 2.5% deposit.
Based on the average property price in Halifax, UK for first-time buyers of £236,779, someone using the scheme would need to put down a deposit of £5,919.
But this varies from one region to another. In the North East where the typical property price for a first time buyer is £142,510 – a 2.5% deposit equates to £3,563. In Greater London, where prices are £455,312 for a new buyer to get on the ladder, a buyer would need to save £11,380 for a 2.5% down payment.
Emeritus Professor Joe Nellis, head of economic research at accountancy and consultancy firm MHA, said affordability remains the main barrier to any real recovery in the housing market.
“Mortgage borrowing costs are rising, households are still struggling with the cost of living, and economic uncertainty is causing many potential buyers to delay purchasing decisions.”
He said “Your First Home” would help lower barriers to homeownership, but that policy, or any other that stimulates the demand side of the housing market, would have only limited success unless accompanied by a significant increase in housing supply.
“Otherwise, any boost in purchasing power will ultimately lead to higher housing prices in the longer term,” he warned.
“Currently, the UK housing market has stalled. Improving affordability for first-time buyers may open up demand, but this will take some time to materialize.
“A more sustainable recovery in the housing market requires lower mortgage interest rates, stronger buyer confidence, and most importantly, more homes.”
