"Affordability is key, as rates slowly reduce and potentially stabilise, which will further boost the market."
The latest UK House Price Index data from the ONS and Land Registry shows that average UK house price annual inflation was -0.1% in the 12 months to September - the first annual fall in the UK’s average house price since April 2012.
UK house price annual inflation has been generally slowing since July 2022, when annual inflation was 13.8%. The provisional estimate for the average UK house price was £291,000 in September 2023, which was little changed from 12 months ago, but above the recent low in March 2023.
Average house prices over the 12 months to September 2023 decreased by -0.5% in England and -2.7% in Wales, but increased in Scotland by 2.5% and in Northern Ireland by 2.1%.
The North East saw the highest annual percentage change of all English regions in the 12 months to September (1.6%), while the South West saw the lowest at -1.6%.
On a monthly basis, the average UK house price decreased by 0.5% in September, following a month-on-month increase of 1.1% in August.
Tomer Aboody, director of MT Finance, commented: "The minimal price decrease shows that while the market isn't as bullish as it was 24 months ago, buyers are still there to transact.
"Affordability is key, as rates slowly reduce and potentially stabilise, which will further boost the market. With today's news that inflation is now sub-5 per cent, further confidence could potentially creep back in with buyers finding themselves in a position to transact.
"With the Prime Minister needing some strong news behind him with a general election coming up, could some restructuring of stamp duty also be on the cards?"
Alan Davison, director of customer sales at Together, said: “A fall in house prices may be welcome news for first-time buyers, allowing those who have previously been locked out of the market because of affordability issues to take their first steps on the housing ladder.
“As we enter 2024, we’re expecting a further softening in demand from amateur buy-to-let landlords for good quality, smaller homes. We’re already seeing buy-to-let investors exiting the market, which is unsurprising given the succession of tax and regulatory changes, on top of higher rates increasing monthly mortgage payments.
“However, this exodus may lead to a larger choice of properties coming up for sale, presenting more affordable opportunities for first-time buyers and second steppers who’ve previously struggled to navigate the tricky property market.
“We are also waiting to see how any announcements in this month’s Autumn Statement will impact people’s property plans next year. With the King’s Speech confirming housing market reform will be addressed as part of this, all eyes will be watching for any signs of new policies and solutions to boost homeownership.”
Nathan Emerson CEO of Propertymark, added: "Across the UK, we are starting to see certain geographical regions demonstrating a small uplift regarding house prices, based on month-by-month analysis. However, it remains very early days yet before we can confidently say we are witnessing sustained growth once again.
"Overall, we are continuing to see an uncertain housing market on the back of elevated inflation and interest rates. Currently many people are still approaching the market with caution, and this will likely remain the case until there is a higher level of consistency with personal finances. As inflation starts to come back towards more manageable levels, Propertymark remain optimistic we will start to see a smoother path ahead. However, we currently have the situation of consumers being extremely mindful regarding affordability and such people will likely only commit to the housing market once they feel assured of a long-term stability - mainly in the form of lower interest rates."