UK house prices dropped by 0.3% month-on-month in September, following an increase of 0.2% in August, Halifax has revealed.

The bank’s latest house price index found that year-on-year, house prices in the UK increased by 1.3%, after jumping by 2% in August. The latest figure is the slowest annual rise in property prices since April 2024.

The average UK property price stood at £298,184 in September.

Head of mortgages at Halifax, Amanda Bryden, said this slight dip in monthly house prices reflects a market that has remained broadly stable, with prices increasing 0.3% in the year-to-date.

She added: "It’s also important to remember that prices vary widely depending on characteristics like location and property type. As a result, many homes are available at a cost well below this headline figure. For example, for those looking to take their first step on the property ladder, the typical first-time buyer home costs £236,811, up 1.7% year-on-year, with pockets of even greater affordability to be found across different regions.

"While affordability remains a challenge, a relatively lower mortgage rate environment and steady wage growth have helped support buyer confidence."

Northern Ireland continued to be the country with the fastest annual property price inflation in the UK, with the average price increasing by 6.5% to £216,496 in September.

In Scotland, house prices rose by 4.5% year-on-year to £215,588, while prices in Wales jumped by 1.9% to £227,845.

In England, the North East was the best performing region, as average property prices increased by 4.8% to £180,443.

London remained the most expensive region in the UK to buy a property, with prices rising by 0.6% year-on-year to £543,497.

Personal finance analyst at Bestinvest, Alice Haine, stated that the slow pace of growth comes as buyers and sellers await clarity on potential property tax changes in the upcoming Autumn Budget.

She concluded: "The lacklustre data suggests the market has not only failed to shrug off the effects of April’s increase in stamp duty land tax, but that speculation around possible reforms - including a national sales levy to replace stamp duty, capital gains tax on high-value main residences, council tax reform and applying National Insurance to landlord rental income – is creating a fresh cloud of uncertainty.

"Despite the uncertainty, mortgage rates have eased from the peaks seen at the height of the cost-of-borrowing crisis thanks to five interest rate cuts since August last year. Those hoping for further respite may have to wait a little longer. The Bank of England has signalled caution towards further rate cuts as it continues to battle sticky inflation, suggesting there will no further relief for mortgage borrowers in the short-term."

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