Mortgage Rate Rises Set To Put Pressure On House Prices

The UK's housing market is showing signs of slowing and rising interest rates are set to exert "significant downward pressure" on prices in the months ahead, Halifax has said.

The mortgage lender said house prices had been "largely flat" since June.

Prices rose at an annual rate of 9.9% in September, the Halifax said, the slowest rate since January.

Interest rates on typical two and five-year fixed-rate mortgages hit their highest for a decade this week.

And on Friday they rose further still. The rate on a typical two-year fixed rate mortgage hit 6.16%, according to Moneyfacts, the highest for 14 years.

The rate on a typical five-year fixed-rate mortgage deal has also topped 6% this week for the first time in 12 years, with the rate now at 6.07%.

Mortgage rates have been rising for months but saw a sharp increase following the mini-budget last month.

Uncertainty over future interest rates after the mini-budget also led lenders to pull more than a thousand mortgage deals from the market.

The Halifax said that house prices dipped slightly in September, falling 0.1% from the month before, with the typical UK property now costing £293,835.

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