Average house prices fell by -0.4% in October, according to Halifax, the third monthly fall recorded in the last four months.

This took the price of a typical UK property to a five-month low of £292,598 (down from £293,664 in September).

The annual rate of house price growth dropped to 8.3% in October as property price inflation slowed in all but one English region (the North East) during the last month.

A slowdown was also recorded in Northern Ireland, Scotland, and Wales.

Fall in first-time buyer house prices

When the data is split into buyer types, most notable was the drop in property prices for first-time buyers, said Halifax.

Annual first-time buyer house price growth fell to 7.5% in October from 10.1% in September. The lender notes that this wasn’t surprising, ‘given the greater challenges for first-time buyers in deposit-raising, plus tighter requirements for higher loan-to-value mortgages’.

Kim Kinnaird, director at Halifax Mortgages, said: “Though the recent period of rapid house price inflation may now be at an end, it’s important to keep this is context, with average property prices rising more than £22,000 in the past 12 months, and by almost £60,000 (+25.7%) over the last three years, which is significant.”

“Understandably we have seen consumer caution grow, as industry data shows mortgage approvals and demand for borrowing declining. The rising cost of living coupled with already stretched mortgage affordability is expected to continue to weigh on activity levels. With tax rises and spending cuts expected in the Autumn Statement, economic headwinds point to a much slower period for house prices.”

Iain McKenzie, CEO of The Guild of Property Professionals, added: “House prices are now starting to simmer down, but the effect is less dramatic than might be expected considering the economic upheaval of the last few months.

“Much of the chaos from the mini-Budget has been successfully navigated by the new Chancellor, but it’s clear that sentiment has shifted from the optimistic mood seen during the early summer.

“With recession on the horizon, all eyes will be on how the jobs market holds up, which will determine how the property market weathers the storm over the coming months and years.

“We are still seeing the demand for good quality housing among first-time buyers, but reduced mortgage availability and rising interest rates may cause some to sit on their deposit until the market stabilises.”