According to an index, the average house price fell slightly in September, compared to the record level recorded the previous month.
Figures dating back to the summer indicate the housing market may have already entered a more sustained period of slower growth, Halifax said.
In the UK, house prices edged down 0.1% in September, according to figures from Halifax.
The annual rate of house price growth also slowed, from 11.4% in August to 9.9% in September, returning to single digits for the first time since January.
A typical UK property now costs £293,835, according to the Halifax Index.
In reality, house prices have remained largely flat since June, up around £250
The number of mortgage products available has fallen sharply following the recent mini-budget and, as product choice has gradually returned, lenders have priced them higher.
The average five-year fixed-rate mortgage and the average two-year rate rose above 6% this week – the first time this has happened in over a decade – according to data from Moneyfacts.co.uk.
Kim Kinnaird, director of Halifax Mortgages, said: “Events of recent weeks have led to greater economic uncertainty, but in reality house prices have remained largely flat since June, up around £250.
“This compares to an increase of over £10,000 in the previous quarter, suggesting the housing market may have already entered a more sustained period of slower growth.
“Predicting what happens next means making sense of the many variables currently in play and the housing market has consistently defied expectations of late.
“While stamp duty cuts, a shortage of homes for sale and a strong labor market all support house prices, the prospect of interest rates continuing to rise sharply amid the cost of housing compression. life, as well as the impact in recent weeks of rising mortgage borrowing costs on affordability, will likely put more downward pressure on house prices in the months ahead.
“This will no doubt be a cause for concern for homeowners, but the unprecedented rate of house price inflation we have seen in recent years has been well above the historical average.
“It’s important to look at slower growth in this context – since the start of the pandemic, average property values have risen by around 23% (nearly £55,000) with detached house prices up by over £100,000 over the same period.”
In the UK, annual house price growth is strongest in Wales, at 14.8%.
Meanwhile, Scotland, London, East England and North East England have seen annual house price inflation fall to single digit levels.
The West Midlands has overtaken the South West to record the highest annual growth rate in England, with house prices rising 13.3% over the past year.
Tom Bill, head of UK residential research at estate agent Knight Frank, said: “It’s a safe bet that UK property prices have now peaked.
“The impact of rising mortgage rates will begin to hit demand and purchasing power in the coming months, which we believe will lead to a 10% decline over the next two years for prices in the Kingdom. -United.”
Mark Harris, managing director of mortgage brokerage SPF Private Clients, said: “While the turmoil of the past two weeks will go down in the history books, money markets appear to have calmed down a bit.
“It is important to reiterate that the mortgage market is still open for business.”
As the cost of living crisis looms, some buyers are compromising on their priorities to secure a property within their original budget
Alice Haine, personal finance analyst at Bestinvest, said: “While the pace of rising mortgage rates has accelerated since the mini-budget, the situation is not a complete surprise.
“Mortgage costs have risen steadily since December, when the Bank of England began raising its base rate by a record 0.1% in a bid to rein in runaway inflation.
“The base rate now sits at 2.25%, with expectations it could climb as high as 1% at the Monetary Policy Committee meeting next month, pushing mortgage rates up again.”
Nathan Emerson, chief executive of estate agent body Propertymark, said: ‘Buyers… are analyzing the market and taking their time moving, so we will continue to see that reflected in the prices achieved.’
Matthew Thompson, sales manager at Chestertons, said the estate agent “is seeing an increasing number of house hunters who want to secure a property as soon as possible and take out a fixed rate mortgage”.
He added: “It helped keep the September property market active and competitive. As the cost of living crisis looms, some buyers are compromising on their priorities in order to secure a property below their original budget.
Martin Beck, EY Item Club’s chief economic adviser, said: “Combined with the weakening economic outlook and the compression of household incomes, the EY Item Club expects property values to decline by 5% or more in the next year.”
Nicky Stevenson, managing director of estate agent Fine & Country, said sterling’s weakness provided a window of opportunity for overseas investors, adding: “In higher value market areas like London, economies can now be achieved compared to the beginning of the year and we are already seeing a spike in interest from abroad.
Iain McKenzie, managing director of the Guild of Property Professionals, said: “Estate agents are still seeing stock shortages in many parts of the country, which has supported high property prices throughout the boom.”
Here are the average home prices in September and the annual increase, according to Halifax:
– East Midlands, £245,082, 11.7%
– East of England, £340,839, 9.7%
– London, £553,849, 8.1%
– North East, £170,999, 9.9%
– North West, £229,106, 12.8%
– Northern Ireland, £184,570, 10.9%
– Scotland, £204,305, 8.5%
– South East, £399,895, 10.6%
– South West, £311,229, 12.5%
– Wales, £224,490, 14.8%
– West Midlands, £255,822, 13.3%
– Yorkshire and Humber, £208,318, 11.4%