UK house prices unchanged in September, Lloyds data shows

By David Milliken

LONDON, Oct 7 (Reuters) - British house prices were flat in September after recording their first annual fall since 2023 in August, according to figures published by Lloyds on Wednesday that were weaker than expected by analysts.

Both the monthly and annual price readings showed no change, while on a quarterly basis prices were down 0.2% as higher mortgage rates put pressure on the market.

"For now, the housing market appears to be balancing buyer caution with continued underlying demand," Lloyds mortgages director Andrew Asaam said.

New enquiries from prospective mortgage borrowers were coming in at the fastest pace since February, he added.

Economists polled by Reuters had a median forecast for a 0.1% monthly rise and a 0.2% annual increase.

While the Bank of England has kept interest rates unchanged since the outbreak of the U.S.-Iran war at the end of February, mortgage rates have risen sharply due to rising market borrowing costs for lenders and expectations of future BoE hikes.

Financial markets are pricing in a more than 90% chance that the BoE will raise rates by a quarter point after its next meeting in November and investors see three more rises in 2027 – though similar forecasts earlier this year proved premature.

(Reporting by David MillikenEditing by William SchombergEditing by William Schomberg)