UK property values, according to Halifax, are anticipated to maintain a downward trend throughout the upcoming year.

The UK housing market is showing signs of stabilisation, according to Kim Kinnaird, director of Halifax Mortgages. After a period of significant decline, the average UK property price dropped by 0.4% between August and September, marking a slowdown in the rate of falling house prices compared to the trend that began in April.

The average UK house price now stands at £278,601, a drop of around £1,200 from August. This decrease is less pronounced in Northern Ireland and Scotland, where property prices have fallen less significantly. In Northern Ireland, the average price of a property is £184,108, representing a fall of less than £400, and in Scotland, they have reduced by 0.8% and the average cost of a home is now £201,594.

The current activity levels in the UK housing market are subdued, with lower levels of new instructions to sell homes and agreed sales. This trend is reflected in the South of England, which continues to see the most downward pressure on property prices, falling by 5.7% over the last year.

Kim Kinnaird attributes the market's movement to borrowing costs, stating that higher interest rates are impacting mortgage affordability. However, she notes that wage growth remains strong, helping with affordability. Despite the drop in prices, UK house prices are up 1% since 2021, when the Bank of England began hiking up interest rates.

In August, the average UK property price fell by 4.6% on an annual basis, which was the largest year-on-year house price decrease since 2009. However, in September, property prices reduced by 0.4%, a significant improvement. This suggests that the housing market may be slowly recovering from the impact of rising interest rates.

In a buyer's market, homeowners are becoming more realistic about their target selling prices. The house price to income ratio is at its lowest level since June 2020, with a value of 6.2 in September. This indicates that houses are becoming more affordable relative to income, which could further stimulate the market.

Unfortunately, the search results do not contain specific data on which city or region in the United Kingdom experienced the highest reduction in average property prices between August 2021 and September 2022. As the market continues to evolve, it will be interesting to see how these trends play out in different parts of the country.

UK property values, according to Halifax, are anticipated to maintain a downward trend throughout the upcoming year.