UK house prices flatline as rising mortgage costs weigh on market

UK house prices remained stagnant in September, according to a leading index, as rising mortgage costs began to impact the market. The average cost of a home was £298,441, roughly the same as it was a year earlier and in the previous month, according to the tracker from Lloyds, previously known as the Halifax HPI.

Economists polled by Reuters had predicted a 0.1% monthly rise in prices, as well as a 0.2% annual increase. This follows a 0.3% decline in August, marking the first drop in three years. Prospective buyers faced challenges due to geopolitical uncertainty, higher mortgage rates, and stretched affordability.

In recent weeks, most major banks and building societies have increased prices due to turmoil in the global bond markets, despite no change in the Bank of England base rate since December last year.