UK house prices were steady on the month in September, according to data released by mortgage lender Nationwide on Friday.
Prices were unchanged following a 0.7% increase in August, and versus expectations of a 0.3% jump.
On the year, house price growth eased to 9.5% in September from 10% a month earlier. This marked the first single-digit growth since last October and the lowest level since April 2021.
London remained the weakest-performing region, although it did see a modest pickup in annual growth to 6.7% from 6.0% last quarter.
Nationwide chief economist Robert Gardener said: “There have been further signs of a slowdown in the market over the past month, with the number of mortgages approved for house purchase remaining below pre-pandemic levels and surveyors reporting a decline in new buyer enquiries. Nevertheless, the slowdown to date has been modest and, combined with a shortage of stock on the market, this has meant that price growth has remained firm.
“By lowering transaction costs, the reduction in stamp duty may provide some support to activity and prices, as will the strength of the labour market, assuming it persists, with the unemployment rate at its lowest level since the early 1970s.
“However, headwinds are growing stronger suggesting the market will slow further in the months ahead. High inflation is exerting significant pressure on household budgets with consumer confidence declining to all-time lows.”
Gardner said housing affordability is becoming more stretched, with deposit requirements a major barrier. He pointed out that a 10% deposit on a typical first-time buyer property is equivalent to almost 60% of annual gross earnings, which is an all-time high.
“Moreover, the significant increase in prices in recent years. together with the significant increase in mortgage rates since the start of the year. have pushed the typical mortgage payment as a share of take-home pay well above the long-run average,” he said.
Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, said: “The latest data from Nationwide suggest the staggering jump in mortgage rates finally is starting to weigh on buyer demand.”