The nationwide house price index revealed that the average UK property is now £273,566 compared to £274,251 in September.
According to Robert Gardner, chief economist at Nationwide, this is the weakest growth since January 2024.
He said: “Market activity and house price growth have slowed in recent months, partly reflecting the uncertain economic backdrop. Geopolitical tensions remain high, with conflict in the Middle East putting upward pressure on energy prices, stoking concerns about inflation.
“This in turn has led to increased financial market expectations of bank interest rate increases, resulting in continued upward pressure on market interest rates supporting mortgage rates.”
Looking ahead, he said homeowners should expect much of the same in the near term since new buyer inquiries have been weak. He also stated that consumer sentiment declined in October due to concerns about the economy.
But Gardner believes that once the “energy shock” fades there will be “good reasons” to believe the property market will gain momentum.
The data covers the period leading up to the Budget which also saw mortgage lenders increase their rates. The average five-year fixed rate mortgage was hovering around the 6% mark through most of October, according to Moneyfactscompare.co.uk.
Each of these factors will have an impact on the property market across the UK.
Amy Reynolds, head of sales at Richmond estate agency Anthony Roberts, said: “Mortgage rates have been rising much faster than anyone expected since the spring, and buyers have changed the way they behave. People are choosing to borrow less and are being cautious about moving.”
“There is no doubt that the anticipation of what might be in the budget has slowed the market.
“Finally, we have some certainty, but a reduction in stamp duty would have been a real help, and while lowering the mansion tax threshold has been postponed for now, fear of what might come to squeeze ordinary people has put the brakes on an already sluggish market.
“With interest rates expected to rise next week, fixed rate mortgages are unlikely to fall before Christmas, so December will be quieter than usual.”
