The latest house price index released by chartered surveyor firm e.surv has found that the average house price now stands at £353,958 in England and Wales, down £200 on August.
Annually, average prices in September are around 3.3% lower than last year, with prices as a whole in England and Wales about £25,000 below the peak reached in October 2022.
The index highlights how cost-of-living issues have improved for some households, whilst market sentiment has improved thanks to falls in mortgage rates.
However, buyers remain very price-sensitive due to ongoing pressures being placed on household finances. This is in addition to vendors offering their properties for sale with strong housing demand being more prominent.
According to the index, higher-priced markets such as London and the Southeast are more likely to benefit from the recent cut to the Bank of England base rate, which could facilitate a pick-up in house prices across England and Wales.
If London and Southeast prices were excluded, the 3.3% year-on-year fall in house prices in September would be cut to 2.8%.
Where London has had minimal impact on national price levels, performance in the Southeast as depressed the market by 1% in some months.
This also applies to the East of England, with prices remaining 7-9& below peak levels. However, as the impact of lower mortgage rates and affordability starts to filter thourgh, this could lead to material improvements elsewhere in the country.
Richard Sexton, director at e.surv, said: “The negligible small reduction in prices reflects the mixed news for housing in the broader economy. While the cost-of-living pressures have eased for many households and falls in mortgage rates have helped affordability, the falls in interest rates predicted at the beginning of the year have not really materialised. The General Election, Euros and Olympics, all contributed to flat growth in the broader economy and likely took its toll on the housing market.
He added: “On the horizon is the budget and while there is little expectation of help for buyers, there is a clear expectation from government announcements to date of tax rises that will impact them. This is likely to be especially true for vital first-time buyers who are often supported by the Bank of Mum and Dad.”