House prices up but market slows

The Index found that the annual pace of growth dropped from 9.4% in September to 9% this month.

Mortgage approvals were also down and declined by 20% in September when compared to the beginning of 2014.

Robert Gardner, Nationwide's chief economist, said: "A variety of indicators suggest that the market has lost momentum.

"The number of mortgages approved for house purchase in September was almost 20% below the level prevailing at the start of the year.

“Some forward looking indicators, such as new buyer enquiries, suggest that activity may soften further in the near term, especially in London."

And Jeremy Duncombe, director, Legal & General Mortgage Club, agreed that the market has now begun to slow.

He said: “These figures demonstrate that the rapid rise in house prices we have witnessed in the past year has started to slow.

“While some homeowners may not welcome this development, it is not bad news. Rapid house price growth is not beneficial for the market as prices would ideally rise in line with wage inflation.

“The rapid increase we have experienced recently in parts of London and the South East left people at risk of being locked out of the market altogether.

“It is also important not to get carried away by the headline figures on the housing market. This often disguises a very regional picture. Much of the country is still below the peak of 2007.

“The market is beset by an insufficient supply of housing. We need to be building new houses, and it is encouraging to see that, with the general election approaching, this issue seems to be topping the political agenda.”

The average UK house price now stands at £189,333.