The average UK house price fell by £3,000 in October after reaching a record high the previous month, new figures have shown.
Office for National Statistics (ONS) data found that the typical property value for the month was £268,000, down from a peak of £271,000 in September.
The stamp duty holiday in England & Northern Ireland that had caused a surge of buyers on September 30 ended, and it was the end of it all.
Despite the fall, the average house price was still £24,000 higher than a year earlier.
House prices increased by 10.2 per cent over the year to October, with the highest rate of growth coming in Wales, where properties soared by 15.5 per cent to £203,000.
Office for National Statistics (ONS) data found that the typical property value for October was £268,000, down from a peak of £271,000 in September
Despite the fall, the average house price was still £24,000 higher than a year earlier. House prices increased by 10.2 per cent over the year to October, with the highest rate of growth coming in Wales, where properties soared by 15.5 per cent to £203,000.
Prices in England rose to £285,000 (9.8 per cent), in Scotland to £181,000 (11.3 per cent) and in Northern Ireland to £159,000 (10.7 per cent).
ONS head of economic statistics Sam Beckett said: ‘Following last month’s record level of house prices, annual house price inflation slowed in October, with annual growth rates in England, Wales and Scotland all lower than in September.’
She also stated that London continued to exhibit the lowest annual growth and the East Midlands were the best performing.
In the 12 months to October, the average East Midlands price rose by 11.7%.
London’s house prices increased 6.2% each year.
Despite having the lowest annual growth, London’s average house prices remain the most expensive of any region in the UK at an average of £516,000 in October.
Despite months of high activity, there’s now a slowdown in the market.
Experts attributed the fall to the end of the stamp duty holiday on 30 September, with the policy having helped to push up house prices since it was introduced in July 2020 as it meant that home buyers paid up to £15,000 less in taxes.
Time is changing: In October 2018, the annual rate of house price change was 10.2%. It was lower than September’s 12.3%.
Lucy Pendleton (property expert, independent estate agents James Pendleton) said that although house prices fell due to the tax cut on stamp duty, it was more of a stumble than a fall.
“Nonetheless, the sky is changing and house prices decreased in all 70 percent of UK regions in October.
“It appears that the market is reversing the disorienting pattern of annual growth, which was characteristic of the UK’s Covid era housing market.
Earlier this week, Rightmove told This Is Money that the frantic pandemic property market will ease and return to ‘closer to normal’ over the next few months – although but house prices are still expected to rise 5 per cent in 2022.
The typical property asking price dipped in December, down 0.7 per cent, or £2,234, according to the property listings portal giant.
The typical home coming fresh to market was listed for £340,167, compared to £342,401 the previous month, Rightmove said.
The real estate company predicted that the property market would get back to more normal conditions during 2022, because more homes were set to come to the market, fulfilling pent-up demand from buyers and perhaps slowing the sharp price increases that have been seen in the past year and a half.
Although there were some drops in asking price, experts think the fall will be minimal. This is because there are fewer homes available, which drives up demand.
Anna Clare Harper is chief executive at property consulting firm SPI Capital. She stated that the biggest challenge facing the housing market going forward was the scarcity of stock in particular of houses. This means that prices will likely remain high.
On the market: This two-bed, grade II-listed country cottage in Drayton Parslow, near Milton Keynes in Buckinghamshire, is listed on Rightmove with an asking price of £550,000
In Prestatyn, Wales, this spacious four-bed bungalow can be snapped up for £270,000
A six-bed, three-bath home near Colchester will set buyers back £1.45million
In Yarm, North Yorkshire, this two-bed end-of-terrace is listed for £270,000
A two-bed ground-floor flat in this home in Grove Vale, Birmingham, is listed for £160,000
Although mortgage rates remain near their historic lows, they could rise if the Bank of England raises its base rate.
After the ONS announced today that November saw inflation at a record 5.1 percent, it will continue to be pressured.
Although some believe this is unlikely, it could be decided at tomorrow’s meeting of the Monetary Policy Committee.
Mark Harris, CEO of SPF Private Clients mortgage broker, stated: “With inflation at a 10-year high, there is more pressure for the Bank to increase rates.
“However, the Committee has historically not made a move, and rates have been raised in December. Therefore, the February meeting seems more likely. The Bank will have time to assess the impact of the Omicron variant on economic activity.
Lenders are willing to lend, and mortgage rates continue to be very competitive. The Bank of England could relax the stress test to allow more buyers to realize their dream of home ownership. This will improve the efficiency of the market.
Comparing countries: House prices in England are the highest, but Wales’s house prices have seen greater increases in recent years, according to ONS House Price Index
Wales saw much higher than average house price growth at 15.5 per cent in the year to October, with the typical price sitting at £203,000.
This is slightly less than the 16.5 Percent increase in September that the ONS registered.
Scotland saw prices rise 11.3 per cent to £181,000, while Northern Ireland saw them rise 10.7 per cent to £159,000 and England 9.8 per cent to £285,000.
The East Midlands saw the greatest annual price increase in house prices, rising by 11.7% from October 2021 to October 2021. This is a decrease of 14.2 percent from September.
London had the lowest average annual price growth, which saw prices rise by 6.2% in the 12 months to October. But, it was still a large increase over the September 2.8 percent.
Pendelton stated that London has been slower than the larger country regarding house price growth over Covid, but it is beginning to show signs of revival. Change is on the horizon, as the capital’s annual rate of growth has shifted rapidly from 2.8% to 6.2% in one month.
Despite being the region with the lowest annual growth, London’s average house prices remain the most expensive of any region in the UK at an average of £516,000 in October 2021.
The North East continued to have the lowest average house price at £148,000, having surpassed its pre-economic downturn peak in December 2020.