House prices fell again in October slipping 0.4%, the sharpest drop in value since February 2021

Economy
By Liam

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House prices fell again in October, falling 0.4%: the sharpest fall in value since February 2021 as buyers battle the cost of living and mortgage hikes

  • UK house prices fell 0.4% in October – the third drop in four months
  • The average UK home price is now £292,598, down from £293,664
  • The acceleration of mortgage rates and the crisis in the cost of living is hitting the market

By Fran Ivens Because this is money

Published: | Updated:

House prices continued to fall in October, falling 0.4 percent compared to falling just 0.1 percent the previous month, according to Halifax’s latest house price index.

It’s the third decline in the past four months, meaning typical UK property now costs £292,598, down £1,066 from £293,664 last month.

Year on year, prices are still rising, although the growth rate is slowing down.

Decline: House prices fell 0.4% in October, less than the 0.1% dip in September

Prices rose 8.3 percent in the 12 months to October, down from 9.8 percent in the year to September, the mortgage lender said.

The monthly decline is the strongest price decline since February 2021.

Kim Kinnaird, director of Halifax Mortgages, said: “While the recent period of rapid house price inflation has now come to an end, it’s important to keep this in context, with property prices increasing by more than £22,000 on average. over the past 12 months and by almost £60,000 or 25.7 per cent over the past three years, which is significant.

“While a post-pandemic slowdown was expected, the housing market has undoubtedly suffered a significant shock as a result of the mini-budget experiencing a sudden acceleration in mortgage rate hikes.

While it’s likely those rates have peaked for the time being — following a rollback of previously announced fiscal measures — recent events seem to have encouraged people with existing mortgages to review their options, and some would-be homebuyers to take a break. to take.

“Understandably, we’ve also seen increasing consumer caution as industry data shows mortgage approvals and loan demand declining.”

The average UK home price is now £292,598 lower than £293,664 last month

The average UK home price is now £292,598 lower than £293,664 last month

Kinnaird added that the combination of the ongoing crisis in the cost of living and mortgage affordability will continue to affect activity levels.

In addition, with tax hikes expected in the upcoming fiscal review in the fall, “economic headwinds point to a much slower period for house prices.”

However, there are still important factors driving house prices, as the housing stock remains low and employment is high.

The extent to which a UK recession increases unemployment is likely to determine how house prices will compare in the coming months.

What to do if you need a mortgage?

Borrowers who need to find a mortgage because their current fixed-rate deal is expiring, or because they have agreed to a home purchase, have been urged to act, but not to panic.

Banks and mortgage banks are still lending and mortgages are still being offered and applications are being accepted.

However, rates change quickly and there is no guarantee that deals will last and not be replaced by higher rate mortgages.

This is Money’s best mortgage interest calculator powered by L&C that can show you deals that match your mortgage and property value

What if I have to transfer?

Borrowers should compare rates and speak to a mortgage broker and be willing to trade to get a rate.

Anyone with a fixed-rate deal that expires in the next six to nine months should research how much it would cost to re-mortgage now — and consider taking on a new deal.

With most mortgage agreements, costs can be added to the loan and they are not charged until it is closed. By doing this, borrowers can secure a rate without paying expensive arrangement fees.

What if I buy a house?

Those with a home purchase should also aim to get rates as soon as possible so that they know exactly what their monthly payments will be.

Home buyers should be careful not to overextend themselves and be prepared for the possibility that house prices could fall from their current high levels as higher mortgage rates limit people’s borrowing capacity.

Compare mortgage costs?

The best way to compare mortgage costs and find the right deal for you is to talk to a good real estate agent.

You can use our best mortgage interest calculator to display deals that fit your home value, mortgage size, term and fixed interest needs.

However, keep in mind that rates can change quickly, so the advice is that if you need a mortgage to compare rates and then talk to a broker as soon as possible, they can help you find the right mortgage for you. .

> Check out the best fixed rate mortgages you can apply for

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