The latest snapshot on the UK housing market sees “significant downward pressure” on prices as mortgage costs rise.
The monthly report by Halifax showed just a 0.1% dip in prices last month from August but that the annual rate of growth had slowed from 11.4% to 9.9%.
It also, however, pointed to factors supporting prices including the shortage of new homes, strong wage growth and cuts to stamp duty revealed in the government’s mini-budget.
The country’s largest mortgage lender said that predicting the path for prices ahead was tough given that the market has consistently outperformed expectations but the price trend suggested a downwards path in the short term due to affordability concerns.
It spoke up after it was revealed that the average mortgage interest rate had risen to above 6%, according to data from financial information company Moneyfacts.
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It means households are paying the greatest portion of their income on mortgage payments since 1989 at a time when the rate of inflation is running at a 40-year high.
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2:05
Mortgage burden to hit 80s levels
The mortgage rate shift reflects a higher base rate of interest – currently at 2.25% – imposed by the Bank of England as part of its bid to tackle the surge in inflation mostly caused by the fallout from Russia‘s war in Ukraine.
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However, market mayhem that followed the chancellor’s tax giveaway also prompted mortgage rates to rise as lenders, including Halifax, pulled products temporarily to ensure they reflected higher funding costs.
Kim Kinnaird, director of Halifax Mortgages, said of the market conditions: “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.
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1:05
Shop around for mortgage deals
“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.
“Predicting what happens next means making sense of the many variables now at play, and the housing market has consistently defied expectations in recent times.
“While stamp duty cuts, the short supply of homes for sale and a strong labour market all support house prices, the prospect of interest rates continuing to rise sharply amid the cost of living squeeze, plus the impact in recent weeks of higher mortgage borrowing costs on affordability, are likely to exert more significant downward pressure on house prices in the months ahead.”
Europe must “ramp up” pressure on Russia “to bring an end to this barbaric war”, a Downing Street spokesperson said after Sir Keir Starmer chaired a meeting with the Coalition of the Willing.
Earlier, the prime minister met with Ukrainian PresidentVolodymyr Zelenskyy, French President Emmanuel Macron and German Chancellor Friedrich Merz at Downing Street for crisis talks on the future of Ukraine.
After the Downing Street meeting, a spokesperson said Sir Keir “convened a call with other European allies alongside President Zelenskyy”.
“The leaders all agreed that now is a critical moment and that we must continue to ramp up support to Ukraine and economic pressure on Putin to bring an end to this barbaric war.”
Image: Friedrich Merz, Sir Keir Starmer, Volodymyr Zelenskyy and Emmanuel Macron at Downing Street. Pic: Reuters
During the earlier meeting, the Downing Street spokesperson said that the leaders “discussed the importance of the US-led peace talks for European security and supported the progress made”.
All four “underscored the need for a just and lasting peace in Ukraine, which includes robust security guarantees,” the spokesperson added.
“The leaders agreed that, while diplomatic efforts continue, Europe must stand with Ukraine, strengthening its ability to defend against relentless attacks that have left thousands without heat or light,” they said.
“They also discussed positive progress made to use immobilised Russian sovereign assets to support Ukraine’s reconstruction.”
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Mr Zelenskyy arrives at Downing Street
After arriving in the UK, Mr Zelenskyy said in a post on Telegram that “we are joining our efforts to end this war with a decent peace for Ukraine” and that “security must be guaranteed”.
He later said: “We can’t manage without Americans, we can’t manage without Europe and that is why we need to make some important decisions.”
The discussions come as US President Donald Trump accused Mr Zelenskyy of having failed to read the latest peace plan.
He said he was “a little disappointed” in the Ukrainian leader, while insisting Russia’s Vladimir Putin was “fine with it”.
When asked directly if he believed the US president would walk away from Ukraine, he answered: “I think he may, what’s good about my father and what’s unique about my father is you don’t know what he’s going to do. He’s unpredictable.”
Image: Pic: Reuters
Sir Keir had earlier insisted any ceasefire must be “just” and “lasting”, adding: “We are at a critical stage in the push for peace.
“The principles remain the same. We stand with Ukraine, and if there is to be a ceasefire, it needs to be a just and lasting ceasefire.”
Mr Macron had insisted Ukraine’s allies have “a lot of cards” – but the main issue was to “finalise these peace negotiations” and find the “best possible conditions for Ukraine, for the Europeans, and for collective security”.
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Why the meeting in London is important
Moments after arriving at Downing Street, Mr Merz said he was “sceptical about some of the details in documents coming from the US” but that was one of the reasons for Monday’s talks.
The four European leaders emerged from Downing Street at around 2.20pm for a group photo – but declined to answer any questions from the media.
Sir Keir and Mr Zelenskyy then went back inside the prime minister’s residence for further talks while Mr Macron and Mr Merz departed.
The London meeting comes after Mr Zelenskyy’s officials concluded three days of talks with US diplomats.
Over the weekend, Mr Zelenskyy said he had discussed “next steps” with Mr Trump’s advisers and was “determined to keep working in good faith”.
According to Vatican sources, the Ukrainian president will next meet with Pope Leo at Castel Gandolfo, the papal residence outside of Rome, on Tuesday morning.
Arne Slot has said he has “no clue” whether Mohamed Salah has played his last game for Liverpool.
The 33-year-old forward told journalists after Saturday’s 3-3 Premier League draw at Leeds – his third game not starting for Liverpool this season – that he has been“thrown under the bus” by the club, and his relationship with head coach Slot had broken down.
When asked at a press conference on Monday whether Salah has played his last game for the club, Slot said: “I have no clue. I cannot answer that question at this moment in time.”
Slot did add that “I’m a firm believer there’s always a possibility to return for a player”, but told reporters: “It was a surprise to me when I heard he gave the comments he gave.”
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0:52
Salah trains despite Slot row
The Liverpool boss was asked whether Salah could come back into contention for Saturday’s Premier League game with Brighton at Anfield and the Dutchman says that is a decision which would be taken after the Inter game on Tuesday night.
Slot also said that “I would have to find out why he said what he said” when asked whether the row could have been avoided.
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“I have to guess a little bit. Is it because he doesn’t play? Is it about me not playing him? What could I do differently? Playing him. Maybe that is not the reason he thinks and feels this way.
“He has the right to feel what he feels but he doesn’t have the right to share it with the media. He does, but then it is up to us to react on it.”
The forward is due to travel to the Africa Cup of Nations (AFCON) with Egypt on 15 December and has been linked with a January move to the Saudi Pro League.
Heavy rain and flooding, bringing possible “danger to life,” have been forecast for parts of Wales and England on Tuesday as Storm Bram hits the UK.
Amber warnings have been issued by the Met Office for large areas of South Wales and Cornwall from midnight to 10am on Tuesday.
Heavy rain will build from Monday evening, continuing through the night and into Tuesday morning, with between 50mm (two inches) and 75mm (three inches) falling over around nine hours.
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As much as 100mm (four inches) may fall in a few exposed locations, forecasters said.
Deep or fast-flowing floodwaters are possible, causing damage to buildings and flooding homes and businesses, with roads cut off and travel disrupted.
Parts of northwest Scotland were already under an amber warning on Tuesday for “very strong” winds reaching as high as 90mph (145kmh) from 4pm until the end of the day.
Flying debris “could result in a danger to life” – and there could be damage to buildings and homes along with the risk of roofs being “blown off” due to the “very strong and disruptive winds”, the Met Office warned.
Forecasters added there was the potential for large waves and beach material “being thrown” across sea fronts, roads and properties.
Storm Bram, named by the Irish weather service Met Eireann, could bring more than half a month’s rainfall to some parts of the UK in just a 24-hour period, the agency said.
Yellow warnings for rain have also been issued for most of Wales, the South West and the central belt of Scotland, the Met Office said.
Yellow and orange warnings are in place across Ireland on Monday and Tuesday, with “very strong to gale force” winds forecast on Tuesday.
Image: Yellow and amber weather warnings for Tuesday. Pic: Met Office
The Met Office said strong winds forecast from Monday evening through until Wednesday could cause disruption, with gusts of 50-60mph (80-97kmh) predicted widely and 70-80mph (113-129kmh) in some places.
A yellow weather warning for rain comes into force from 6pm on Monday, and will be in place until 2pm on Tuesday, covering parts of southwest England and Wales, and stretching to parts of Herefordshire and Hampshire.
The Met Office has also issued a yellow warning for high winds from Dorset to Cornwall and up to North Wales, in place from 10pm on Monday until 4pm on Tuesday.
It said transport networks could face disruption, with delays for high-sided vehicles on exposed routes and bridges, and coastal roads and seafronts affected by spray and large waves. Power outages are also possible.
Strong winds and rain can also cause delays to air and ferry transport, alongside road and train journeys.
From 6pm on Monday, up to 40mm of rain could fall in some areas, with 60-80mm of rain over Dartmoor and high ground in South Wales, which would amount to more than half the average monthly rainfall in December.
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The predicted rainfall across southwest England and South Wales is expected to hit already saturated ground and could lead to difficult travel conditions.
There are also further yellow warnings for wind and rain on Tuesday across Northern Ireland, Scotland, Wales and northern England.
Yellow warnings for wind have been issued for Scotland and parts of northern England on Wednesday.
Met Office chief forecaster Dan Suri said the storm “will bring a very wet and windy spell of weather, with very strong winds and further heavy rain which falling over saturated ground, could cause flooding impacts”.
He said gusts of “up to 90mph could be recorded” within the amber wind warning over northwest Scotland, while “gusts of 50-60 mph, and perhaps 70mph in a few spots, are expected across Wales, southwest England and Northern Ireland”.
The Met Office said it is possible 100mm [of rain will fall] over higher ground in the south of Wales and parts of Devon.