The latest UK House Price Index has been released for September showing that house prices climbed 9.5% year-on-year, but remained unchanged compared with a month earlier.

According to data from the Office for National Statistics (ONS), the average property price in the UK now sits at £294,559.

House prices in England rose 9.6% on the year, taking the average property price to £314,278 and in Wales, property prices saw a 12.9% annual rise, leaving the average house price at £223,798.

Meanwhile, in London, a 6.9% annual increase means that the average home in the capital is now priced at £544,113.

On a monthly basis, prices in England failed to move, in Wales they increased by 2% and, in London, house prices dropped by 0.6%.

Industry reaction:

Tom Bill, head of UK residential research at Knight Frank, said: “In a feat unlikely to be repeated in October, UK house prices were flat in September compared to the previous month. Prices fell last month after the mini-Budget caused mortgage rates to spike but house prices are not necessarily now on a steeper downwards trajectory.

“We expect mortgage rates to come down and a sense of stability to return as financial markets respond positively to the new government. However, the lending landscape is shifting after 13 years of ultra-low borrowing costs, which we believe will put enough downwards pressure on prices so that they return to their summer 2021 level.”

Nicky Stevenson of Fine & Country commented: “The mini-Budget towards the end of the month sparked unprecedented volatility in the mortgage market, something which will become more apparent in the months ahead.

“All eyes will now turn to chancellor Jeremy Hunt’s Autumn Statement, which is expected to include both tax rises and spending cuts.

“Changes to capital gains tax allowances could have an adverse impact on the buy-to-let sector at a time when many landlords are already exiting, and potential new entrants are finding the benefits no longer outweigh the uncertainty.

“A private rental sector in retreat would mean a deepening accommodation crisis across the regions and spiralling rents for tenants.”

Director of Benham and Reeves, Marc von Grundherr, said: “The property market has continued to weather the storm of late and while we may have seen a reduction in buyer demand due to higher mortgage rates, we’re simply not seeing any downward pressure applied to sold prices, despite a static rate of growth on a monthly basis.

“This is largely due to the fact that buyers have been keen to transact at pace in order to secure the rates currently on offer, before they climb even higher. In doing so, they’ve helped to maintain a consistent level of activity in the process which has kept the market afloat.”

The MD of Barrows and Forrester, James Forrester, commented: “It’s incredibly hard to gauge the true health of the UK property market at present, with increasing mortgage rates leading to a period of turmoil, followed by a renewed level of certainty as a result of a government refresh.

“That said, there remains a large degree of economic instability and this week’s Autumn Budget may well add to this.

“At the same time, we can expect two things come December. Mariah Carey in the music charts and the usual seasonal slowdown in property market activity.

“As it stands, the property market remains resolute, but we will have a much clearer view of things come 2023.”

Matthew Thompson, head of sales at Chestertons, said: “The expectation that London’s property prices could see an adjustment led to an uplift in buyer demand across the capital in September. Compared to August, there were 17% more buyer enquiries in September and 18% more viewings.

“We were also encountering an increasing number of house hunters who wanted to secure a property as soon as possible and take out a fixed rate mortgage. This contributed to September’s property market remaining busy and competitive. Due to the cost of living crisis, some buyers began compromising on their priorities in order to secure a property under their initial budget.”

Lawrence Bowles, Savills residential research director, said: “Data published by the ONS today shows that house price rises have started to level off across the country. Average UK values rose by 9.5% over the last twelve months, taking them to £294,559 in September this year. But the annual pace of price rises slowed from 13.1% the previous month.

“Much of the volatility we’ve seen in house price movements over the last few months is a relic of the stamp duty holiday which ran until September 2021. Buyers rushing to complete before the succession of stamp duty deadlines last year distorted the market, both in terms of transaction numbers and average prices.

“More pertinent right now is the change to average prices over a shorter period. There was no significant change in average house prices month on month in the UK, and quarter-on-quarter growth slowed from 4.1% in August to 3.9% in September.

“This suggests that the rapid rise in mortgage costs is yet to have a marked impact on achieved values. Data from the Bank of England shows the average quoted rate for a 2-year fix at 75% loan-to-value rose from 1.29% in October 2021 to 6.01% in October this year. For someone repaying their mortgage over a 25-year term, that translates to a rise in monthly payments of 66%, but we’ve begun to see rates easing, a trend that will be very keenly watched over coming months.

“With mortgage affordability so stretched, we are likely to see sales volumes in the mainstream housing market slow over the rest of the year. We’ve forecast average price falls of -10% in 2023, with values recovering through 2024 and beyond as mortgage rates fall back to more affordable levels, though the less mortgage-dependent prime markets – broadly the top 5% to 10% by value – will be less impacted.”