House prices suffer biggest drop in three years

New forecasts suggest UK house prices may continue falling, as persistently high borrowing costs and inflation concerns weigh on buyers. The latest figures show the sharpest annual decline in three years, raising concern that confidence in the housing market could weaken further after the Bank of England’s interest rate rise.

The Lloyds index recorded a 1.2 per cent fall to an average £296,285 in the year to October, compared with a 0.1 per cent decline in the year to September. London prices fell 3.1 per cent to £524,892, while the North East and North West saw annual growth of 2 and 2.2 per cent respectively. A revived Help to Buy scheme is due to start in April, though experts say affordability and borrowing costs remain concerns.