Rachel Reeves 'slamming the brakes on UK property market' as house prices fall

House prices fell last month, with property experts warning "the government has slammed the brakes on the property market". The average UK house price edged down by 0.3% (£794) in September, following a modest rise in August, according to Halifax's House Price Index.

The typical home now costs £298,184. Over the past 12 month,s prices have grown by 1.3%, the slowest annual rate since April 2024. Property experts fear that the Autumn Budget, coming next month, is "creating a lot of uncertainty".

Amanda Bryden, Head of Mortgages at Halifax, said: "This slight monthly dip in house prices reflects a housing market that has remained broadly stable, prices are up 0.3% since the start of the year.

"It's also important to remember that prices vary widely depending on characteristics like location and property type. As a result, many homes are available at a cost well below this headline figure. For example, for those looking to take their first step on the property ladder, the typical first-time buyer home costs £236,811, up 1.7% year on year, with pockets of even greater affordability to be found across different regions.

"While affordability remains a challenge, a relatively lower mortgage rate environment and steady wage growth have helped support buyer confidence.

"Although the broader economic outlook remains uncertain, with the affordability picture gradually improving, we continue to expect modest growth through the remainder of the year."

Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said the government is to blame for house prices falling.

He added: "The government has slammed the brakes on the property market, and needs to address more than just the process of buying as announced yesterday. All the recent analysis points to a stagnant market as we wait for the government to make some positive changes in the cost of moving home.

"Whilst mortgage rates have settled recently, Stamp Duty is arguably the main reason that we have fewer homeowners looking to move, and that impacts on the supply of ideal property for first-time buyers, too."

Andrew Montlake, CEO at London-based Coreco, said the coming Autumn Budget is the problem.

He continued: "The affordability picture is definitely improving slightly and we're seeing a lot of lenders innovate, which should be welcomed.

"The real problem is the Autumn Budget, which is creating a lot of uncertainty. Sentiment is so important in the property market and, right now, the feel-good factor just isn't there."

David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth Ltd, agreed, adding: "The upcoming Budget looms over the head of the property market like the sword of Damocles, holding back potential home-movers and those looking to get on the ladder from making a firm decision.

"Until Rachel Reeves gives some clarity on property taxation plans, we can expect little growth, as this continues to add extra uncertainty to those considering purchasing. It's not all bad news, though, with some lenders innovating and improved affordability, along with some mortgage rate competition, means there is a chink of light at the end of the tunnel."

Daniel Hobbs, CEO at Rayleigh-based New Leaf Distribution, described the market as "sluggish".

He said: "What the Halifax refer to as a stable market others on the coalface might define as sluggish. We are in the ultimate so-so market. Prices are stumbling along, with no real momentum.

"It feels like everything is on pause right now and it's going to be a long pause given that many Christmas trees will be up by the time the Autumn Budget is delivered."

Chris Barry, Director at London-based Thomas Legal, said he is seeing prices dropping in the last two months.

He added: "Prices are marginally up during the year to date but the broader trajectory is categorically one of decline. We have been witnessing price drops across the south of England over the past two months so it's no surprise this is now starting to filter through into the data.

"We expect further declines until the Budget where we will see what surprises the Chancellor has brought us for Christmas."

Ranald Mitchell, Director at Norwich-based Charwin Mortgages, said it's a buyers' market.

He said: "This is no surprise after a fairly steady summer. With the Budget looming, buyers are taking a cautious stance and treading carefully rather than rushing in.

"Sellers who genuinely want to move are having to be pragmatic. Striking a deal is now the difference between selling and sitting on the market. The power balance has shifted slightly back to buyers, but realistic pricing is what's keeping the market moving."

Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.uk, agreed, adding: "Modest growth seems like a fair prediction given that the Autumn Budget has resulted in many would-be buyers sitting tight. The one positive amid ongoing economic and political uncertainty is that it is very much a buyers' market and people are increasingly alive to that fact.

"That is keeping the market moving even as Budget uncertainty grips the nation."