UK house prices were unchanged in September despite the impact of higher interest rates, with annual growth also flat at 0.0%, following a 0.3% monthly fall in August, according to the latest Lloyds house price index.

The average property stood at £298,441, up slightly from £298,395 in August, even as the regional divide continues to widen.

Andrew Asaam, mortgages director at Lloyds, said: "While the market overall has been fairly subdued, property prices have so far proved resilient during a period of higher mortgage rates, which has been driven by changing expectations around the future path of Base Rate. That’s mirrored in wider economic data, with household spending holding up better than many expected despite energy and other cost pressures arising from the Middle East conflict.

"Whether that picture continues is likely to depend on how confident consumers feel that the latest cost‑of‑living pressures will prove temporary. Confidence has long 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.

"For now, the housing market appears to be balancing buyer caution with continued underlying demand."

First-time buyer (FTB) prices were also relatively unchanged, rising to £236,779 from £236,568 in August, but remained below the February record of £241,244, which AJ Bell's Sarah Coles called a "small silver lining on the black cloud hanging over the property market".

Lloyds said measures including the government's Your First Home scheme for eligible new-build properties in England and increased availability of low-deposit mortgages could help more first-time buyers enter the market, although key details of the scheme are not expected until the October Budget.

Regional disparities continued to widen. Northern Ireland recorded the strongest annual growth at 7.4%, taking the average property value to a record £231,917, while Scotland rose 3.4% and Wales 1.2%. In England, the North East led with growth of 2.4%, followed by the North West at 1.9%. London recorded the largest annual decline, with prices down 2.2% to £531,548, while the South East fell 2.1% and Eastern England declined 1.6%.

---