Just when it appeared house price growth would never slow down, property values have begun to fall.

According to the latest Halifax House Price Index, they dropped by 0.4 per cent in October, following a decline of 0.1 per cent the previous month.

Director of Halifax Mortgages Kim Kinnaird noted that October’s plummet is the “sharpest” since February 2021.

Consequently, the annual growth rate has fallen from a peak of 12.5 per cent in June to 8.3 per cent in October.

At its highest, property values were typically £293,992, but they have since dropped to £292,598.

Ms Kinnaird stated: “There’s no doubt the housing market received a significant shock as a result of the mini-budget, which saw a sudden acceleration in mortgage rate increases.”

Zoopla recently predicted that mortgages with interest rates of between four and five per cent will become far more typical, after interest rates shot up to around six per cent recently. Consequently, buyer demand dropped by a third since the mini-budget was announced at the end of September.

She noted that even though mortgage rates increases are likely to have paused now, following the reversal of the mini-budget, it could still have lasting effects, noting that some homebuyers have decided to pause their property search.

The cost-of-living crisis, limited mortgage affordability, and steep house prices are likely to reduce activity in the market.

“With tax rises and spending cuts expected in the Autumn Statement, economic headwinds point to a much slower period for house prices,” the property expert anticipated.

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