House prices fell in September, with some experts saying property values may have peaked.
Property prices fell by 0.1% between August and September, according to the latest index by Halifax.
A 0.1% fall may seem small - and Halifax also logged a 0.1% monthly fall in July 2022 and a 0.5% drop in July 2021.
But experts say this latest drop is a sign of things to come, not a temporary blip to overall rising house prices.
Tom Bill, head of UK residential research at Knight Frank, predicts that house prices will fall over the next two years.
He said: “It’s a fairly safe bet that UK house prices have now peaked. The impact of rising mortgage rates will begin to hit demand and spending power in coming months, which we believe will lead to a fall of 10% over the next two years for UK prices.
"We may see mortgage rates fall to some extent if financial markets become more reassured by the government’s economic plan but the events of the last fortnight have been a reminder that the era of ultra-low rates is coming to an end."
Halifax said the housing market may be slowing as well.
Kim Kinnaird, director at 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, up by around £250.
"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."
Analysts think house prices could drop because would-be homebuyers struggle to afford property due to higher interest rates, rising inflation and the risk of recession.
Most homebuyers use mortgages to buy homes, and the price of these have been soaring quickly.
The Centre for Economics and Business Research said new two-year fixed-rate deals would reach 7.4% between April and June next year.
That means anyone with a 25-year £200,000 mortgage would pay £3,912 a year more.
Experts think the Bank of England could raise base rate from 2.25% to 6% next year, as the central bank battles against high inflation - currently 10.1%.
A top Bank of England official warned millions of borrowers to brace themselves for a “significant” rate hike.
Data from financial experts Moneyfacts reveals the number of mortgages available has begun to rise following a big drop after the mini-Budget when lenders pulled deals because of uncertainty over interest rates.
As of yesterday there were 2,430 mortgages on the market. That compares with a low of 2,258 on October 1 but is still 1,500 fewer than before Mr Kwarteng’s intervention.
Mortgage brokers say lenders are “playing safe” but believe costs could eventually start to dip.
