UK house prices fell by -0.6% in October, a larger drop than in recent months, taking the average property price down to £296,285. 

This is according to the Lloyds Bank index, formerly known as the Halifax index.

This month’s fall means prices are now -1.2% lower than a year ago, the biggest annual fall since October 2023.

A Lloyds spokesperson says: “Housing demand is currently being tested by a challenging economic backdrop. 

“Renewed inflationary pressures, driven in part by the conflict in the Middle East, are keeping borrowing costs high and adding to the squeeze on household finances, making some buyers understandably more cautious.”

But the bank stresses that this acceleration in price falls must be seen in the round.

It says house prices have changed relatively little over the past couple of years, as the market has gradually adjusted to higher interest rates. 

The recent rise in energy and other household costs has added to the pressure on buyers, “so some adjustment in [house] prices is not surprising” notes the spokesperson.

Looking ahead, Lloyds warns conditions are likely to remain subdued in the near term.

But the spokesperson concludes: “We don’t expect this to lead to a sustained period of falling house prices. 

“With wages continuing to rise faster than property prices, the gap between earnings and house prices should gradually narrow, helping affordability to improve over time.”