House prices down in September

House prices unexpectedly fell 0.5 per cent in September and were 2.3 per cent lower in the three months to September compared with a year ago, a survey by mortgage lender Halifax showed.

Analysts had expected a rise of 0.2 per cent on the month, for a three-month annual fall of 2.1 per cent.

September's declines were less marked than the 1.1 per cent monthly fall and 2.6 per cent 3-month annual drop posted in August, and Halifax said a mixed pattern this year – with prices rising in some months but falling in others – showed the housing market lacked direction.

"Greater uncertainty about economic and personal financial circumstances, together with pressure on householders' finances from weak earnings growth, higher inflation and increases in taxes, are likely to be constraining housing demand," said Halifax housing economist Martin Ellis.

"Despite these pressures, low interest rates and a rise in employment over the past year, have been supporting the market, resulting in broad stability in both prices and activity. We expect little change over the remainder of this year."

Halifax noted that house prices in the calendar July-September quarter were 0.1 per cent higher than in the April-June period – the first quarterly rise since quarter one in 2010. The average price of a home stood at £161,132 in September.