UK house prices fell unexpectedly in September, while annual growth also slowed to a three-month low, according to the latest Halifax house price index.
House prices fell 1.4% in September, the sharpest fall since April. This follows a 0.2% fall in August and defied expectations among experts of a 0.2% rise.
The annual rate of house price growth eased to 2.5% from the 3.7% recorded in August - the smallest rise since June.
The average UK house price was £225,995, down from £229,958 in August.
Russell Galley, managing director, Halifax, says: “The annual rate of growth is near the top of our forecast range of 0-3% for 2018, as a low supply of new homes and existing properties for sale, combined with historically low mortgage rates and a high employment rate, continue to support house prices.”
Howard Archer, chief economic adviser to the EY Item group, says prices are being dragged down by the poorly performing London market and parts of the South East.
He believes that Chancellor Philip Hammond’s decision to scrap stamp duty on homes under £300,000 to help first-time buyers appears to have provided “limited support to the housing market”.
He says: “We still get the impression that the housing market is finding it hard to really step up a gear in the face of still limited consumer purchasing power, fragile consumer confidence and wariness over higher interest rates.”
Jeremy Leaf, north London estate agent and a former Royal Institution of Chartered Surveyors (RICS) residential chairman, says: “After last month’s rather mixed bag, there is still no clear direction with house price growth continuing to slow.
"Sluggish transactional activity is bad for the property market but much worse for the economy.
“On the ground, sellers have not shrugged off Brexit concerns to put their properties on the market to sell in sufficient numbers to make a difference.
"However, buyer interest has improved in what remains more of a needs-driven market since people return from a protracted summer break.”
The figures from Halifax contrast with that of rival Nationwide which reported a slight pick up in September.
Nationwide says house prices rose 0.3% from August to September, taking the average price up to £214,922.