UK house prices fall at steepest rate in three years

Summarised from 6 outlets · Updated 6 Nov, 09:47 · Archive

UK house prices fell 1.2 per cent annually in October, the biggest drop in more than three years, according to Lloyds.

UK house prices fell at their steepest rate in more than three years in October, recording their biggest annual decline since October 2023. According to Lloyds Banking Group, the average property price stood at £296,285, representing a 1.2 per cent annual fall. Month-on-month, prices fell 0.6 per cent in October, equivalent to £1,882, marking the fourth consecutive monthly decline.

The monthly fall was sharper than analysts had expected. Commentators had predicted a small monthly rise of 0.1 per cent, which would have marked the first increase since June.

Regional variations were marked. London's housing market was the worst affected, with prices falling 3.1 per cent annually to an average of £524,892. The Guardian reported that Greater London, the South East and South West of England all saw some of the biggest price falls. By contrast, the North East and North West of England recorded price growth of 2 per cent and 2.2 per cent respectively.

Andrew Asaam, mortgages director at Lloyds, said: 'Housing demand is currently being tested by a challenging economic backdrop. Renewed inflationary pressures, driven in part by the conflict in the Middle East, are keeping borrowing costs high and adding to the squeeze on household finances, making some buyers understandably more cautious.' He added that whilst conditions were likely to remain subdued in the near term, Lloyds did not expect this to lead to a sustained period of falling house prices.

Prospective buyers face high borrowing costs, with the average two-year fixed mortgage at 5.97 per cent and the average five-year fixed rate at 5.99 per cent, according to The Guardian. On Thursday, the Bank of England's monetary policy committee raised the base rate by a quarter of a point to 4 per cent, the first increase in three years, citing inflationary pressures caused by the Middle East conflict and its effect on oil prices.

The Daily Express reported that wages were continuing to rise faster than property prices, which should gradually narrow the gap between earnings and house prices, helping affordability to improve over time. Homebuyers and housebuilders are looking forward to the government's revived Help to Buy scheme, which is set to begin in April next year, according to City AM.

How it is being reported

• House prices fell at steepest rate in more than three years in October as buyers struggle with higher mortgage ratesGreater London, the south east and south west of England saw some of the biggest price falls.This is Money · 6 Nov, 09:33
• UK house prices record biggest annual fall in three yearsThe average property value was £1,882 lower in October than in September, according to Lloyds’ index.The Independent · 6 Nov, 09:22
• Lloyds records biggest annual drop in UK house prices in three yearsThe average property price in October was £1,882 lower than it was in September, Lloyds' analysis shows.Daily Express · 6 Nov, 08:54
• UK house prices fall at steepest rate in more than three yearsOctober drop of 0.6% leaves average price of property at £296,285, says Lloyds, as high mortgage rates hit market Business live – latest updates UK house prices fell at the steepest rate in more than three years in October, marking the fourth consecutive monthly decline, as high mortgage rates hit the housing market. The average price of a typical UK property stood at £296,285 last month as prices unexpectedly fell 0.6% compared with September, the steepest fall since the lender Lloyds recorded a 1.6% drop in August 2023. Continue reading...The Guardian · 6 Nov, 08:05
• Lloyds records biggest annual fall in UK house prices in three yearsThe average property value was £1,882 lower in October than in September, according to Lloyds’ index.Evening Standard · 6 Nov, 07:49
• House prices suffer biggest drop in three yearsHouse prices suffered their biggest fall in more than three years in October, with buyers’ confidence now in danger of slumping lower after Thursday’s interest rate hike. The average house price in the UK fell by 1.2 per cent to £296,285 in the 12 months to October, according to the Lloyds house price index. This [...]City AM · 6 Nov, 07:34

In this story: Lloyds Banking Group · Bank of England · London · North East · North West · Andrew Asaam

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