High interest rates aren’t the only reason for the house price slump

To no-one’s surprise, house prices fell again last month. Average prices were down by 0.4 per cent in September, according to Halifax, with the typical property now worth £278,600 compared with the peak of £293,500 in June 2022. Much of this, inevitably, has to do with high interest rates. For three decades until last year the housing market was pumped up by a downwards trend in interest rates, which increased the amount that buyers could borrow. Now that has come to an end, buying power is contracting. There is unlikely to be any rapid recovery. If rates remain high – and gradually it is dawning on markets that this is likely to be the case for far longer than previously expected – then we could be in a housing bear market for years to come.

But there is another factor at play: older homes are becoming blighted by poor ratings on an Energy Performance Certificate (EPC).