The Halifax House Price Index for October has revealed that prices fell by 0.4% as the market has been rocked by financial events including the fallout from the mini-budget in September. The reduction is in itself fairly negligible – just over £1000 off an average home but the reduction follows a 0.1% drop in September.
“What really concerns me isn’t this drop itself but what might be ahead of us” says Jonathan Rolande, a professional property buyer. The mini-budget disaster was on 23rd September. It lead to much higher borrowing rates but those lucky enough to already have a mortgage in place would have had it honoured at the old, lower rate. Halifax’s figures don’t yet show the true impact, for that we need to wait two or three more months. I’m concerned that these figures could prove to be worse still.”
Despite these fears, property is still a lot more expensive than it was a year ago – over 8% more in fact but this could be quickly eroded by further monthly falls.
“We are now in danger of seeing those people who bought property during the summer with homes worth less than they paid. Lack of confidence in the market can quickly spiral and price drops can become a self-fulfilling prophecy. I hope that we now have a period of some stability and a measured budget in mid-November that gets the property market back on track.” says Jonathan.
Kim Kinnaird, Director, Halifax Mortgages, said: “Average house prices fell in October, the third such decrease in the past four months. The drop of -0.4% is the sharpest we have seen since February 2021, taking the typical property price to a five-month low of £292,598. While the pace of annual growth also continued to ease, to +8.3% compared to +9.8% in September, average prices remain near record highs.”