UK house prices were unchanged in September (0.0%), following a 0.3% fall in August, the latest Lloyds house price index shows.
The average property now costs £298,441, while annual growth also remained flat at 0.0%.
The average UK first-time buyer property price was broadly unchanged in September at £236,779, up marginally from £236,568 in August. However, this remains below the record high of £241,244 reached in February.
Northern Ireland continues to lead the UK, with annual house price growth increasing to 7.4% from 6.8% last month. The average property value has also reached a new record high of £231,917.
Scotland continues to post solid growth, with prices up 3.4% over the past year to an average of £223,330. Growth has also strengthened in Wales, rising to 1.2%, with the typical property now valued at £231,287.
In England, the strongest annual growth remains in the north. The North East recorded growth of 2.4%, while the North West saw prices rise 1.9%.
The West Midlands was the only other English region to see positive annual growth, at 0.8%.
By contrast, house prices remain under pressure across much of southern England, where higher average property values continue to present a greater affordability challenge.
Greater London recorded the largest annual decline, down 2.2% year-on-year, closely followed by the South East, down 2.1%.
Andrew Asaam, mortgages director at Lloyds, said: “While the market overall has been fairly subdued, property prices have so far proved resilient during a period of higher mortgage rates, which has been driven by changing expectations around the future path of Base Rate. That’s mirrored in wider economic data, with household spending holding up better than many expected despite energy and other cost pressures arising from the Middle East conflict.
“Whether that picture continues is likely to depend on how confident consumers feel that the latest cost of living pressures will prove temporary. Confidence has long been a key driver of housing market activity, and will play an important role in shaping demand over the remainder of this year and into 2027.
“For now, the housing market appears to be balancing buyer caution with continued underlying demand. While higher mortgage rates and wider economic uncertainty are encouraging some people to take a more measured approach, new enquiries from prospective buyers are now at their highest since February. That should help sustain activity in the near term, with any movement in house prices likely to remain modest.”
Jonathan Hopper, CEO of Garrington Property Finders, commented: “It says a lot when a return to stagnation is progress. Lloyds’ data shows that after slipping into the red in August, house prices flatlined again in September - with the average UK home now worth exactly the same as it was a year ago.
“Of course national averages are an abstraction. The only number that really matters to anyone planning a move is what prices are doing in their area.
“On that score, the two halves of Britain are heading in opposite directions. Prices are rising steadily in Scotland and northern England but sliding across London, southern England and East Anglia.
“It’s in these southern areas, where prices are higher, that buyers are facing the biggest affordability squeeze. With mortgage interest rates now at their highest level in three years, lenders won’t lend as much money to movers as they would have done before.
“This is forcing those who need to move to reduce their budget and prompting many of those who want to move to sit on their hands. The pipeline of buyers is slowing sharply too, and Bank of England data shows the number of mortgage approvals for house purchases in August was down 16% compared to the same month last year.
“Both ‘need to’ and ‘want to’ buyers have become much more disciplined about what they can afford. Buyers haven’t disappeared, but sentiment is cautious and those that are looking have smaller budgets and non-negotiable limits. Even a motivated buyer is not necessarily a buyer willing to stretch.
“Sellers who fail to accept this reality risk seeing their homes sit unsold for months. With the average five-year fixed rate mortgage rate hitting 6% this week, the affordability squeeze continues to tighten.
“In response, buyers are repricing the market faster than sellers are repricing their homes, and this impasse is reducing the number of homes changing hands and weighing down prices.
“In a market like this, yesterday’s asking price can quickly become today’s unsold property.”
Jason Tebb, president of OnTheMarket, added: “With house prices unchanged in September, there is an element of caution combined with continued underlying demand as focused buyers and sellers returned from holiday keen to proceed with their moves before the end of the year.
"The market continues to demonstrate remarkable resilience, despite higher mortgage costs. The Bank of England’s decision to hold interest rates so far this year has helped affordability, but there are concerns that rising energy bills may finally force its hand this autumn, depending on the overall risk to inflation.
"All eyes will be on the budget later this month to see what the new Prime Minister and Chancellor have planned. We already know that there will be assistance for first-time buyers buying new-build homes and hope that on balance the budget provides some much-needed impetus for the housing market, as well as the wider economy.”
