The flat result follows a 0.3% fall in August, the first monthly decline in three years, as prospective buyers faced higher mortgage rates and stretched affordability. In recent weeks, most big banks and building societies have increased mortgage costs because of turmoil in global bond markets, even though the Bank of England base rate has not changed since December last year.
On Monday, the average cost of a five-year fixed-rate mortgage reached 6% for the first time in three years. The rise in mortgage rates is bad news for borrowers whose fixed-rate deals are ending, for prospective buyers hoping to take out a mortgage, and for sellers seeking top prices.
The housing market slowdown adds to the squeeze on consumers from higher energy bills, linked to the Iran war, and rising prices elsewhere that have raised concerns of a new cost of living crisis.
Andrew Asaam, mortgages director at Lloyds, said: "While the market overall has been fairly subdued, property prices have so far proved resilient during a period of higher mortgage rates, which has been driven by changing expectations around the future path of base rate." He added that new inquiries from prospective buyers are now at their highest since February, but that any movement in house prices was likely to remain modest.