UK house prices were -0.3% lower in September than the same month a year earlier, according to the latest Halifax House Price Index.
The average house price now stands at £298,184, following a modest fall of £794 compared to August.
Over the past 12 months, prices have grown by +1.3%, marking the slowest annual rate since April 2024.
Amanda Bryden, head of mortgages at Halifax, said: “The average UK house price edged down by -0.3% (£794) in September, following a modest rise in August.
“The typical home now costs £298,184. Over the past 12 months prices have grown by +1.3%, the slowest annual rate since April 2024.
“This slight monthly dip in house prices reflects a housing market that has remained broadly stable, prices are up +0.3% since the start of the year.
“It’s also important to remember that prices vary widely depending on characteristics like location and property type.
“As a result, many homes are available at a cost well below this headline figure. For example, for those looking to take their first step on the property ladder, the typical first-time buyer home costs £236,811, up +1.7% year on year, with pockets of even greater affordability to be found across different regions.
“While affordability remains a challenge, a relatively lower mortgage rate environment and steady wage growth have helped support buyer confidence.
“Although the broader economic outlook remains uncertain, with the affordability picture gradually improving, we continue to expect modest growth through the remainder of the year.”
Nathan Emerson, CEO of Propertymark, said: “A fall in house prices reflects the ongoing pressure on the housing market from higher borrowing costs, economic uncertainty, and affordability constraints.
“While price declines may raise concerns among homeowners and sellers, they also present opportunities, particularly for first-time buyers who have struggled with stretched affordability in recent years.
“A cooling in prices is not unexpected given the current economic backdrop and should be viewed in the context of the significant gains seen over the past few years.
“As we look ahead, the key to restoring momentum lies in improving market confidence, whether through interest rate stability, better mortgage accessibility, or policy measures that ease the transaction process.
“Regional variations remain important to monitor, as not all areas will experience price movements equally.
“Policymakers and industry stakeholders must continue to support a functioning, fluid housing market that works for both buyers and sellers.”
The index also showed a quarterly increase of +0.4%, suggesting that despite slight monthly volatility, the housing market has remained steady overall through 2025, supported by lower borrowing costs and resilient demand among buyers.
Reaction
Karen Noye, mortgage expert at Quilter:
“The latest Halifax index shows that UK house prices fell 0.3% in September following a modest rise in August, with values now 1.3% higher than a year ago. The market continues to tread water as buyers and sellers adjust to affordability pressures and a cautious lending environment. The average house price now stands at £298,184.
“Inflation has eased slightly but remains well above the Bank of England’s 2% target, keeping borrowing costs elevated. Although swap rates have drifted lower, lenders have nudged mortgage pricing up again in recent weeks as they rebuild margins and brace for potential surprises in the budget. This has dampened activity, particularly among first-time buyers who remain highly sensitive to rate movements.
“The government’s plans, announced yesterday, to reform the house-buying process could help reduce costs and delays over time. The proposals to require sellers to provide key information up front and explore binding contracts are designed to make transactions quicker and more transparent. But while these changes may improve confidence, they will not solve the deeper affordability challenge that continues to weigh on the market.
“The latest ONS data also suggest households may have far less of a financial buffer than previously thought. The revised figures halved the estimated household savings ratio for late 2022, implying many families saved significantly less during the post-pandemic recovery than earlier believed. With smaller savings cushions, more households may find it difficult to absorb higher mortgage costs or build deposits.
“In the run-up to the budget, speculation about possible changes to property taxation has added another layer of uncertainty. Reports suggest the Chancellor may be exploring reforms to stamp duty or the taxation of property gains, measures that could influence both short-term activity and longer-term pricing if implemented.
“With borrowing costs still high, weaker household finances and potential tax changes on the horizon, house prices are likely to remain broadly stable in the near term, with regional trends reflecting local supply and demand rather than a clear national direction.”
Guy Gittins, CEO of Foxtons:
“Market momentum remains steady and this underlying stability is encouraging buyers and sellers back into the fold, albeit with a degree of caution ahead of November’s budget.
“For those looking to sell, the key to success is a pragmatic approach to pricing in line with current market conditions, but those looking to complete their sale before Christmas need to be entering the market now with the right agent and an added sense of urgency.”
Marc von Grundherr, director of Benham and Reeves,:
“The UK property market has weathered a year of market uncertainty and buyer indecision with house prices continuing to show positive annual growth, albeit we’ve seen a marginal month-on-month decline due to an air of hesitation ahead of next month’s Autumn Statement.
“Of course, the homebuying process itself remains one fraught with potential delays and pitfalls and so it’s somewhat commendable to see Labour finally pledge to fix it. However, the Government has long known the struggles facing both buyers and sellers and so their renewed claim to act feels more like political point-scoring than meaningful reform.
“In reality, these proposals are unlikely to materialise anytime soon, and the mere suggestion of change could actually cause the market to stall in the short term, as buyers hold out for greater certainty and protection that simply isn’t on the immediate horizon.”
Verona Frankish, CEO of Yopa:
“It’s been very much a case of the tortoise not the hare when it comes to the performance of the UK property market this year and this has arguably been a far healthier market landscape for both buyers and sellers alike.
“Slow but sustainable rates of house price growth have ensured that sellers are motivated to move, whilst buyers aren’t being priced out by sizable shifts in property affordability.
“It will be interesting to see where we go from here given Labour’s latest pledge to overhaul the homebuying process and, as an industry, we’ve long called for reform around the speed and certainty of the property transaction timeline.
“If implemented properly, these changes could go a long way toward boosting confidence among buyers and sellers. The key now will be ensuring that the ambition translates into tangible progress on the ground, rather than getting lost in consultation and delay.”
Daniel Austin, CEO and co-founder at ASK Partners:
“Today’s uptick in property prices offers a glimmer of optimism, but growth remains subdued as high borrowing costs continue to weigh on buyers. The Bank of England’s decision to hold rates provides limited reassurance, with persistently elevated fixed mortgage rates delaying meaningful relief for homeowners and first-time buyers alike.
“The construction sector continues to face headwinds from rising build costs, planning delays, and a shortage of skilled labour, while investors and developers remain motivated by the enduring supply-demand imbalance. Resilient sectors such as co-living, build-to-rent, and storage continue to attract capital, reflecting their long-term fundamentals even as broader activity cools.
“With global volatility high and domestic policy still in flux ahead of the Autumn Budget, the MPC is holding steady. Markets are still pricing in a rate cut before year-end, but with inflation unlikely to return, mortgage pressures will persist. For investors seeking stability amid market uncertainty, including the impact of renewed US protectionism, UK real estate debt remains a compelling option, offering capital preservation, steady income, and insulation from equity market swings.”
