Average house prices fell slightly in September by 0.1% to £293,835, said Halifax.

It marks the second monthly dip in the last three months, according to the UK’s largest lender.

The annual rate of growth slowed further to 9.9% from 11.4% last month. It’s the first time annual house price inflation has fallen under 10% since January.

Kim Kinnaird, director of Halifax Mortgages, said: “The events of the last few weeks have led to greater economic uncertainty, however in reality house prices have been largely flat since June. This compares to a rise of more than £10,000 during the previous quarter, suggesting the housing market may have already entered a more sustained period of slower growth.”

However, Kinnaird pointed out that any potential further falls in house prices come off the back of unprecedented property price inflation over the last two years.

She said: “Since the start of the pandemic average property values have risen by around 23% (almost £55,000) with detached house prices up by more than £100,000 over the same period.”

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, added: “The chaos unleashed on the mortgage market last month will take its toll towards the end of the year and into the beginning of 2023. Rapidly rising interest rate expectations have pushed up mortgage costs so dramatically that we can expect it to depress demand.

“It will force some people to think twice about whether they can afford the home they need, and while others will still be keen, they may struggle to find someone willing to lend to them.”

Across the UK

Wales has the strongest annual house price inflation at 14.8%, with an average property cost of £224,490.

The West Midlands has the strongest rate of annual growth in England, with house prices rising by 13.3% to £255,822.

Annual house price growth in Northern Ireland is 10.9%, with a typical home now costing £184,570.

Scotland saw annual house price inflation of 8.5%, with homes now costing an average of £204,305.

London still has the slowest rate of annual growth amongst the UK nations and regions, with house prices rising by 8.1% over the last year. Though with a typical home costing £553,849 the capital’s average property price remains by far the most expensive in the country.