House prices dropped by 3.6% from August to September marking the biggest fall on record, according to a report by Halifax. However, the bank said that it is too early to conclude that the fall is the sign of a sustained drop in prices.
The survey found that the average price of a home in the UK is £162,096. The quarter on quarter comparison showed a 0.9% fall in prices, which is often considered to be a better indicator of the changing state of the current housing market.
Despite a drop from the 4.6% rise recorded in August, figures are still 2.6% higher than the same period last year.
Martin Ellis, Halifax’s housing economist, said that month-on-month prices had fallen due to a rise in the number of properties for sale but added that sales had dropped due to a “renewed uncertainty” over the state of the economy felt by potential home buyers.
He continued: “Prospects for the housing market remain uncertain. Earnings growth is expected to be very modest over the next year, tax rises are on the way and more people are putting their homes on the market”.
He added: “These will all be constraints on the market, dampening house prices. On the positive side, we expect interest rates to remain very low for some time, which will underpin the improved affordability position for homeowners”.