UK House Prices Hit Steepest Monthly Decline in Year
UK house prices fell 0.6% in October as the Bank of England raised interest rates to 4%, marking the weakest annual growth since 2023.
Average house prices in the United Kingdom fell 0.6% in October to £296,285, representing the steepest monthly decline in at least one year. According to the Lloyds House Price Index, annual price growth dropped to minus 1.2%, the lowest level since October 2023. Regional performance varied significantly, with Greater London experiencing the sharpest annual decrease at 3.1%, while Northern Ireland saw the strongest growth at 4.4%.
Lloyds Bank linked the decline to a challenging economic environment and a 0.25 percentage point increase in the base rate to 4% by the Bank of England, the first such rise in over three years. Mortgages Director Andrew Asaam stated that renewed inflationary pressures and conflict in the Middle East have kept borrowing costs high and squeezed household finances, causing buyers to become more cautious.
Despite the current downturn, Lloyds does not anticipate a sustained period of falling prices because wages are currently rising faster than property values. However, the bank expects market conditions to remain subdued in the near term.
