House prices suffer biggest drop in three years

UK house prices fell by 1.2 per cent in the year to October, their sharpest annual decline since October 2023. The drop, alongside a rise in interest rates and persistent inflation concerns, is adding pressure to buyers and sellers and could further weaken confidence in the housing market.

The Lloyds index put the average UK price at £296,285, compared with a 0.1 per cent fall in the year to September. London recorded the steepest decline, down 3.1 per cent to £524,892, while prices rose by 2 per cent in the North East and 2.2 per cent in the North West. A revived Help to Buy scheme is due to begin in April, but experts say affordability and borrowing costs remain concerns.