Average UK house prices increased by 2.6%, to £272,000, in the 12 months to September, down from 3.1% in the year to August, the latest UK House Price Index from the Land Registry shows.
Average house prices increased by 2.0% in England, 2.7% in Wales and 5.3% in Scotland, in the 12 months to September.
Yorkshire and The Humber was the English region with the highest house price inflation, at 4.5%, up from 2.7% in August.
Annual house price inflation was lowest in London. Prices fell by 1.8% in the 12 months to September, compared with a fall of 0.8% in the 12 months to August.
Jason Tebb, president of OnTheMarket, commented: “Property values continued to rise on an annual basis in September, with the average price £7,000 higher than a year ago. While the Land Registry figures are dated, they suggest that there is some caution and price sensitivity in the market, with annual growth slower than the 3.1% recorded in the year to August.
"With inflation dipping to 3.6% in the year to October, this is welcome news as it provides stability for consumers. It might also help convince the Bank of England to reduce interest rates again at the next meeting in December. This is important for the housing market as the five base-rate reductions in the past 16 months have given a real boost to buyer and seller confidence and activity, although affordability remains a challenge and is keeping property prices in check to a degree.
"With the Budget imminent, we urge policymakers to focus on stability, assisting confidence and supporting the housing market, which is so vital to the wider economy.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, said: "Everyone in the property world has been laser-focused on the Budget – it’s felt like a marathon getting to this point. And while the wait hasn’t brought the market to a standstill, it has absolutely created hesitation. Over the past few weeks we’ve seen noticeably fewer market appraisals, simply because sellers want to know what is coming before making a move.
"That pause now feeds directly into reduced stock for the New Year, which is when the market normally builds momentum. The real message right now is that the Budget hasn’t just shaped sentiment – it has shaped supply."
Gareth Lewis, deputy CEO of MT Finance, added: “Property prices may have stagnated slightly but there are still people trying to buy. One of the challenges they are facing is that it is taking forever for a transaction to go through – whether that is down to lack of commitment or with the budget round the corner, it is hard to tell.
"The key point is that there is a crying need for stimulus in the property market so that it will start functioning properly. Interest rates have come down and settled and mortgage rates are probably where they need to be, but still there is nothing to encourage first-time buyers to get on the ladder or second-steppers and beyond to move up it. Properties are on the market for extended periods of time and even if values were to decrease to make them more affordable, it is unlikely to be enough.
“We need a real call to action. Stamp duty is the biggest expense for most when moving house and reducing or reforming this would create an energy and buzz, saving people money and result in them wanting to transact. The Government should think of it this way: the more people who transact, the more stamp duty it will generate and the more it will drive revenue for the Treasury."
