UK HOUSE PRICES FALL AT FASTEST PACE SINCE MAY

UK house prices fell by 0.2 per cent in September, the fastest monthly decline since May, according to data from Nationwide. The drop reversed a 0.2 per cent rise recorded in August and came in faster than economists had expected, Nationwide said. The average UK home was valued at £274,251 in September. Annual price growth slowed to 0.8 per cent, down from 1.6 per cent in August, Nationwide's figures showed. The building society linked the slowdown to expensive mortgages and uncertainty ahead of the Autumn Budget.

Robert Gardner, Nationwide's chief economist, said market activity and prices had "remained subdued in recent months, in part reflecting the uncertain economic backdrop". He said higher energy prices had fuelled concerns over inflation and expectations that interest rates could rise, adding pressure to mortgage costs that had partly offset an improvement in affordability as wages continued to outpace house price growth. Gardner described this as an "encouraging sign" that energy costs were not feeding through to underlying price pressures, and said activity could regain momentum if the energy shock eases, confidence returns and market interest rates fall. Separate HMRC figures published the same day showed home sales fell one per cent in August compared with July, and two per cent year-on-year.

The property industry is looking to the Budget on 28 October, when John Healey is due to set out the government's new Your First Home scheme, offering government-backed equity loans to some first-time buyers of new-build homes. Nationwide's figures showed a continuing regional divide, with Northern Ireland the strongest performer, up 5.9 per cent year-on-year in the third quarter, though slower than 8.6 per cent the previous quarter. The North West led England with a 3.9 per cent annual rise, while Scotland and the North both recorded 3.3 per cent increases, continuing to outperform southern England.