House prices saw no change in September compared to August, retaining an annual fall of -5.3% nationally, according to Nationwide. Values were most robust in the North West, down -2.2% annually, and weakest in the South West, down -6.3%. This tells us that we are gradually shifting back to a pre-pandemic distribution of regional value growth, with stronger growth in the more affordable parts of the country. 

Further price adjustments are anticipated over the coming months. Demand is still falling faster than supply, according to the August RICS survey, which suggests price falls and lower activity will continue for at least the next few months. More surveyors reported price falls in August than at any time since 2009.

But the medium term outlook has improved, with a sense of finely balanced economic stability. The Bank of England maintained the base rate at 5.25% on 21st September, breaking the trend of 14 consecutive rises since the end of 2021. This followed a surprise fall in inflation in August by -0.1%, according to the ONS, defying the more pessimistic expectations of many economists. 

Lenders have responded by further decreasing mortgage rates as they become more competitive over pricing. There is only so far they can squeeze their margins, however, before a fall in the base rate is needed for rates to go lower. They will also remain wary of new inflation figures which could restart base rate rises if higher than expected. 

Market activity has also been fairly stable but hovered below the pre-pandemic average with completed transactions at 95,000 in August, according to HMRC. These figures have been -14% below their 2017-19 averages for the past three months while sales agreed are down -11% over the same timeframe, according to TwentyCi. Mortgage approvals have slipped further to -32% below their 2017-19 levels in September, according to the Bank of England. This is likely to limit transaction numbers until at least early next year and means the market is more reliant on cash buyers. 

Local variation in price falls has become increasingly apparent in the more lagged Land Registry data. There is an emerging pattern of price falls in the year to June in areas of London, including Brent (-4.6%), Hammersmith and Fulham (-3.1%), and Tower Hamlets (-1.8%), as well as its surrounding areas, including Brentwood (-0.4%), Tunbridge Wells (-0.3%), and Three Rivers (-0.2%).

Annual rental growth across the UK stayed high at 10.3% in August, the same figure as July, according to Zoopla. Rental growth accelerated across all regions except the East, North East, and Yorkshire and Humber on a three-month basis, as competition for limited stock remained elevated.