Biggest annual fall in UK house prices for three years – here's why

• UK house prices recorded their largest annual drop in three years in October, with average property values falling by 1.2% year-on-year to £296,285, representing a 0.6% decline compared to September according to figures from Lloyds.
• Borrowing costs have risen further following the Bank of England's decision to increase the base rate by 0.25 percentage points to 4%, the first interest rate rise in over three years, which will add an average of £30.72 per month for tracker deal homeowners.
• Mortgage experts and property figures attribute the market slowdown to renewed inflationary concerns, higher household costs, and economic uncertainty driven partly by international conflicts, which are creating a challenging backdrop for buyers.
• Despite near-term subdued conditions, experts do not anticipate a prolonged period of falling property prices, as continuing wage growth relative to house prices is expected to gradually improve buyer affordability over time.
• Regional performance varied significantly across the UK, with Northern Ireland leading property value growth with an annual rise of 4.4%, whereas London experienced the steepest drop with a 3.1% decline.

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Lloyds records biggest annual fall in UK house prices in three years