House prices fell in September

House prices fell by nearly 1% in September as the annual pace of growth starts to ease off, new figures show.

This follows a hefty 2.7% increase in August which still leaves the average property costing 2% more than three months ago.

Prices in the three months to September are 8.6% higher than in the same period one year earlier, according to new Halifax figures.

But this marks a slowdown from 9% a year in the previous quarter.

Halifax housing economist Martin Ellis said that housing demand has been strengthening, underpinned by economic growth, rising real earnings and very low mortgage rates.

“Increasing demand is combining with very low supply to drive robust underlying house price growth.

“There is little reason to expect any fundamental shift in the key market drivers over the coming months.”

​Jonathan Adams, director of prime central London estate agency Napier Watt, said the underlying trend is fairly robust despite the September dip.

“However, the national average masks significant regional differences and should be regarded with a healthy dose of scepticism. 

“The housing market is fragmented with higher-value properties struggling to sell as international buyers become more fickle and scared off by the tax incurred when purchasing high value residential property.

“There is very much a ripple effect. The action has moved out from prime central London to the outskirts and those commuter areas where there is better value to be had, although not as much if prices continue to rise as they have been."

Adams said that plenty of stock came onto the market in September, with a number of properties relaunched with price reductions.

“Many properties are now priced where they should have been when they first came to market in the spring but it could be argued that they are still not as low as they need to be.”