UK house prices fall at fastest rate in five years, Halifax finds

UK house prices fell at the fastest rate in five years, with several regions hit by declining prices and Yorkshire, Humber and London the worst hit.

A survey by Halifax and IHS Markit found UK house prices subsided 0.5% in the third quarter compared to the previous period, the first quarterly depreciation since 2012, with the average British home dropping to £214,140 from £215,168 in the second quarter.

The decline in the Halifax House Price index in the quarter still left prices 5.7% ahead of last year, though the rate of annual growth slowed considerably from the 8.3% in the second quarter.

Yorkshire & Humber house prices fell 3.9% in the quarter, with London's first sustained fall in house prices since the end of 2010 recording a 2.5% decline, an acceleration from the 0.5% fall in the second quarter.

Scotland was the only other part of the UK to register back-to-back declines in house prices during the quarter.

Southern England, led by a 10.2% rise in the South East, continued to enjoy strong house price momentum.

IHS Markit's chief business economist, Chris Williamson, said: “The UK’s vote to leave the EU has been accompanied by a clear cooling of the housing market."

He added that homeowner sentiment has since rallied somewhat, though remains weaker than at any time since the height of the eurozone debt crisis in 2012.

“This time, it’s ‘Brexit’ rather than ‘Grexit’ that has caused anxiety to spike in the housing market, so the future trajectory of prices will be very much determined by which path the government decides to choose in taking the country away from the EU, and how bumpy the negotiating route is."

IHS Markit’s base scenario is for prices to fall by 3% in 2017.