Monthly house price growth between August and September last year was 3%. Annually, average house prices were 9.5% higher, according to government figures, 

The monthly change in average house prices was flat in England at £314,278 in September, compared to £315,965 in August. This was a 9.6% annual rise. 

London saw the greatest monthly change with a 0.6% fall in average house prices to £544,113. The capital’s yearly house price increase was also the smallest at 6.9%. 

In Wales, average house prices recorded a 2% uptick to £223,798. On an annual basis, this was 12.9% higher than last year. In Scotland, house prices fell by 0.9% to an average of £191,941 and in Northern Ireland, prices rose by 4.1% to £176,131. These represented yearly increases of 7.3% and 10.7% respectively. 

House price tide is turning

Chris Hodgkinson, managing director of HBB Solutions, said: “All current indicators suggest the market is starting to freeze over with homebuyers giving the idea of homeownership the cold shoulder following a sizeable uplift in the cost of borrowing.  

“This declining level of buyer demand is yet to cause house prices to actually fall, but the tide is starting to turn, and with the market now slowing right down until spring we can expect property values to follow suit sooner, rather than later.” 

Andy Sommerville, director at Search Acumen, said the data was “further evidence of a turning tide for house prices”. 

He added: “As the impacts of previous rate rises and inflation filter through into house prices over coming months, we’d expect to see further declines coming down the tracks.” 

Prices held up by active market and lack of supply 

Malcolm Webb, technical director at Legal and General Surveying Services, said although prices were starting to plateau due to rate rises and other economic pressures, the housing market was “something of a mixed bag”.  

“Property prices are still higher than they were at the same point last year and the slowdown that we’re seeing remains modest. Coupled with the shortage of available housing stock, market activity remains steady.”  

Vikki Jefferies, proposition director at Primis Mortgage Network, said that, despite the cooling of the market, it was a testament to the mortgage market that figures were still above pre-pandemic levels and demand was healthy.  

Andrew Montlake, managing director of Coreco, agrees that a number of predictions about crashing house prices are unlikely to come to pass.

He said: “House prices are set to come under further pressure during the winter months, but the sizeable drops of 10-15% that some are predicting are frankly implausible given the sheer lack of supply and the fact that the jobs market is still strong. A nationwide correction of around 10% is a real possibility after last week’s rate rise by the Bank of England.

“In reality, a fall of 10% is just the froth coming off the market and a reversal of the unsustainable growth we have had since the stamp duty holiday mid-pandemic.”

Buyer status 

The average price paid by first-time buyers rose 0.1% monthly to £245,350. Compared to last year, this was an 8.9% increase. Former owner-occupiers paid £345,044 for their homes on average in September, which was a 0.1% decline on August and a 10.1% rise on last year. 

Natalie Hines, founder at Premier One Mortgages, said: “A correction in house prices is what’s needed to help get first-time buyers on the property ladder. For many first-time buyers, prices have been out of reach for so long. A house price correction could give them the leg-up onto the ladder that they need. How the jobs market holds up in the next year or so will be key.”

Related: End of Help to Buy: 10 alternatives for first-time buyers