Average house prices rose by 1.1 per cent in October, compared to a fall of 0.3 per cent in September says the Halifax.

But prices dropped by 3.2 per cent on an annual basis – however this drop is less than the 4.5 per cent annual decline seen last month. 

South East England continues to see largest annual decline in house prices.

Kim Kinnaird, director of Halifax Mortgages, says: “Prospective sellers appear to be taking a cautious attitude, leading to a low supply of homes for sale. 

“This is likely to have strengthened prices in the short-term, rather than prices being driven by buyer demand, which remains weak overall. 

“While many people will have seen their income grow through wage rises, higher interest rates and wider affordability pressures continue to be challenges for buyers.”

She says that across the medium-term, with financial markets not anticipating a decline in the Bank of England’s Base Rate soon, the Halifax expects house prices to fall further in 2024 with a return to growth having to wait until 2025.

“The current picture should continue to be seen in the context of the longer-term house price trend as, on average, prices remain around £40,000 above pre-pandemic levels” she states.

Despite weakness in overall buyer demand, the first-time buyer market has held up relatively well. 

The latest house price data shows prices for first-time buyers are down 2.4 per cent annually, a notably smaller fall than the market generally over the past year.