Property prices plunge in biggest fall for 12 months

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And property experts warned of more falls ahead as consumer confidence in the market dives.

The value of a typical three bedroom semi fell by 0.4 percent to £292,598 – the third month-on-month drop seen in the past four months, the Halifax said.

This latest slowdown follows monthly falls of 0.1 percent in both July and September.

And annual house price growth slowed to 8.3 percent in October, from 9.8 percent growth recorded in September.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “Mini-budget mayhem exacerbated house price misery, with prices dropping faster than they have in over 18 months.”

“With recession looming, there’s every sign that confidence is draining from the market as house prices have fallen for three months out of the past four.”

“Clearly a downward trend is developing and it would be foolish to rule out significant annual price drops in the coming months.”

Yearly price growth among home movers also fell from 10.3 percent in September to 8.9 percent last month.

The price growth slowdown for first-time buyers was even more marked, slowing from 10.1 percent in September to 7.5 percent in October, the analysis showed.

Kim Kinnaird, director of Halifax Mortgages, said: “While a post-pandemic slowdown was expected, there’s no doubt the housing market received a significant shock as a result of the mini-budget, which saw a sudden acceleration in mortgage rate increases.”

“It’s likely that those rates have peaked for now following the reversal of previously announced fiscal measures.”

“But it appears that recent events have encouraged those with existing mortgages to look at their options and some would-be homebuyers to take a pause.”

“Understandably we have also seen consumer caution grow as industry data shows mortgage approvals and demand for borrowing declining.”

“The rising cost of living coupled with already stretched mortgage affordability is expected to continue to weigh on activity levels.”

“With tax rises and spending cuts expected in the autumn statement, economic headwinds point to a much slower period for house prices.”

Last week, the Bank of England increased the base rate to three percent from 2.25 percent.

This was the eighth consecutive interest rate rise.

Since December last year the average monthly tracker mortgage payment has increased by £284.17, according to figures from trade association UK Finance.

Andrew Simmonds, director at Bristol-based Parker’s Estate Agents, said: “Since the summer, I’ve been telling vendors that their house is worth what it was worth 12 months ago. I’ve lost instructions because they’ve said ‘nah’.”

“However plenty have since come back to me saying: ‘You were right’.”

North London estate agent Jeremy Leaf said: “We are not seeing any collapse in pricing or sales agreed.”

Nathan Emerson, chief executive of estate agent body Propertymark, said more homes for sale are coming to the market “which is providing buyers with a greater choice”.

He added: “This will therefore mean they can be more level-headed with the offers they’re putting forward which will naturally see a softening in prices being achieved over the next few months.”

Jason Tebb, chief executive officer of property search website OnTheMarket.com, said: “Sellers are likely to find that if they don’t price realistically, they may struggle to generate interest.”

However, the price falls must be kept in context, said the Halifax.

Average property prices have jumped significantly by more than £22,000 in the past 12 months and by almost £60,000 (25.7 percent) over the last three years.

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