House prices slow after 2-year surge

HOUSE prices showed signs of ‘slowing in momentum’ last month after more than two years of runaway growth.

Rising mortgage costs are fuelling caution among buyers, according to the Royal Institution of Chartered Surveyors (Rics), which is feeding into property values.

Across Britain, two per cent of property professionals reported prices falling rather than rising in October. This is the first negative reading for 28 months, when the pandemic caused havoc.

Properties in East Anglia and the South East are seeing the weakest growth, with 31 per cent and 16 per cent of surveyors reporting a drop in prices.

First-time buyer inquiries fell for the sixth consecutive month as prospective homeowners battle spiralling mortgage costs and stricter affordability testing.

But demand for rental properties is continuing to rise, with nearly half of those surveyed observing an increase in October. However the research found the number of people becoming landlords fell. This suggests there could be a shortage in the supply of rental properties, which may increase costs in the short term.

The average UK house is now worth £292,598, according to the Halifax house price index published earlier this week – the lowest since May 2022.