UK house prices have fallen for the first time in almost three years, as prospective buyers were squeezed by higher mortgage rates, geopolitical uncertainty and stretched affordability.

Prices have dropped by 0.4% compared with a year ago, the first year-on-year decrease since November 2023, according to the lender Lloyds. That came in below expectations of a 0.2% annual rise, according to a poll of economists by Reuters.