Annual average house prices suffered their largest fall since 2009 as buyers grappled with rising borrowing costs.
The average cost of a property dropped by 4.7pc in the year to September, according to the Halifax house price index, having declined by 4.5pc in the year to August. It was the fifth consecutive month of annual declines.
The fall comes despite the Bank of England holding interest rates steady last month at 5.25pc and means a typical home is worth £278,601, a drop of around £1,200 since last month.
Prices fell 0.4pc in September compared to the previous month, marking the sixth consecutive monthly decline.
Halifax Mortgages director Kim Kinnaird said: “Activity levels continue to look subdued compared to recent years, with industry data showing lower levels of new instructions to sell homes and agreed sales.
“Borrowing costs are the primary factor, given the impact of higher interest rates on mortgage affordability.
“Against this backdrop, homeowners inevitably become more realistic about their target selling price, reflecting what has increasingly become a buyer’s market.”
It comes as figures from Nationwide earlier this week indicated that house prices dropped for the eighth month in a row in the year to September, declining by 5.3pc. However, it said that prices were unchanged compared to August.
Figures from the Bank of England last week showed high borrowing costs pushed mortgage approvals to a six-month low of 45,400 in August.
5 things to start your day
1) Treasury in talks with Bank of England as Metro Bank seeks emergency cash | Challenger lender scrambles to raise up to £600m as share price plunges
2) Sunak made a mistake with net zero changes, says Mark Carney | Former Bank of England governor hits out at Prime Minister’s decision to water down pledges
3) Top Hipgnosis executive sued over historical claims of sexual assault and harassment | The lawsuit comes at a time the company has suffered a sharp drop in its share price
4) Lockdown savings dwindle in ‘clear sign’ of economic slowdown, says Bank deputy | Households use up cash accumulated during pandemic as higher interest rates bite
5) End of the road for chauffeurs as Rolls-Royce owners drive themselves | Outgoing chief executive claims younger buyers are fuelling a dramatic shift in habits
What happened overnight
Asian shares mostly rose in cautious trading after Wall Street drifted to a quiet close amid worries about today’s incoming report on the US jobs market.
Japan’s benchmark Nikkei 225 fell 0.3pc to 31,129.06. Australia’s S&P/ASX 200 rose 0.5pc to 6,906.96. South Korea’s Kospi edged up 0.3pc to 2,411.74. Hong Kong’s Hang Seng jumped 2.1pc to 17,418.95.
Markets in China were closed Friday for a holiday and will reopen on Monday.
Shares in Hong Kong jumped on strong buying of property and technology stocks that have seen sharp losses in recent trading sessions. However, troubled property developer China Evergrande’s shares were down 6.3pc.
A comprehensive report on the overall US job market is due later, and economists expect it to show hiring slowed to a pace of 163,000 jobs added in September from 187,000 in August.
Wall Street stocks closed lower on Thursday as pressure from the bond market also persisted.
The S&P 500 slipped 5.56 or 0.1pc to 4,258.19. The Dow Jones Industrial Average edged down by 9.98 points, or less than 0.1pc, to 33,119.57. The Nasdaq Composite dipped 16.18, or 0.1pc to 13,219.83.
The 10-year yield was at 4.71pc, down from 4.73pc late Wednesday.
