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UK house price growth has slowed, with the average cost of a house falling by a record low, as rising interest rates hit demand, the property provider found. Halifax mortgage loans.

Prices fell 0.1% between August and September, bringing the annual growth rate to 9.9%, from 11.4% the previous month. The cost of a typical home fell slightly to £293,835 from the previous month’s high of £293,992.

House prices have been stable since June, compared to a rise of more than £10,000 in the previous quarter, ‘suggesting that the housing market may already have entered a more sustained period of slower growth’, said Kim Kinnaird, director of Halifax Mortgages.

This comes as mortgage rates rose following the Bank of England’s key interest rate hike.

Mortgage provider Nationwide also this week reported stagnation in house prices in September.

Most regions reported a single-digit slowdown in annual house price inflation, Halifax said, with the exception of Wales where growth remained strong at 14.8%.

London still has the slowest annual growth rate among the nations and regions of the UK, with house prices increasing by 8.1%.

Mortgage rates are expected to rise by around 6% next year, with many economists saying this will lead to a rapid contraction in house prices.

Kinnaird said stamp duty reductions, a shortage of homes for sale and a strong labor market are all supporting house prices.

However, he added that “the prospect of interest rates continuing to rise sharply amid the cost of living squeeze, as well as the impact in recent weeks of rising mortgage borrowing costs on affordability, are likely to put greater downward pressure on house prices in the months ahead.”

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