House price growth slowed to 5.2% in October, down from 5.8% in September, Halifax’s House Price Index has found.
Growth has nearly halved from 10% in March, with prices increasing by just 0.1% from August to October.
Martin Ellis, Halifax housing economist, said: “This expected slowdown appears to have been largely due to mounting affordability pressures, which have increasingly constrained housing demand.
“Whilst house price growth may ease further in the coming months, very low mortgage rates and a shortage of properties available for sale should help support price levels.”
Despite the slowdown prices increased by 1.4% between September and October.
Mark Posniak, managing director of Octopus Property, reckoned the market is in a more resilient state than many expected, though he expected it to be tested further in these politically uncertain times.
He said: “Demand may well be down amid such uncertainty, but as the latest mortgage approvals statistics reveal, it’s by no means out.
“The monthly rise should be taken with a pinch of salt. The quarterly flatness is a much better reflection of where the market is at.
“The low cost of borrowing, weak supply levels and a robust jobs market are preventing prices from falling more sharply.
“Confidence is likely to play an increasingly prominent role in the short- to medium-term.
“As inflation rises, people will feel less well-off and will become more cautious, and this could result in subdued transaction levels.
“Brexit-related uncertainty remains the key narrative for the UK housing market at present, and last week’s high court ruling on Article 50 could see that uncertainty prolonged for longer than anticipated.”
The supply of homes for sale was largely flat between July and September but remains around the lowest levels ever recorded according to the Royal Institution of Chartered Surveyors (RICS).
Jonathan Hopper, managing director of property finder company Garrington Property Finders, said: “Many buyers who sat on the fence in the run-up to the referendum have given up trying to second guess the Brexit saga – and are instead focusing on the market’s strong fundamentals.
“Prices are being supported in several areas by a chronic shortage of supply, but it remains a buyer’s market – with sellers increasingly willing to trim prices.
“However the shift in the balance of power from seller to buyer has prompted pragmatism rather than panic among vendors – which has so far prevented wholesale price cutting.
“Last week’s High Court judgment confirmed that the Brexit process will be neither quick nor easy, but the property market’s robust progress is a reassuring sign of a return to business as usual.”
Jeremy Duncombe, director of Legal & General Mortgage Club, said: “The market cannot continue like this.
“We need to see an innovative house building initiative to provide some respite to this worsening crisis.
“With the Autumn Statement on the horizon, the Government needs to deliver on its promise to build thousands of affordable homes for our country.
“Until we see some real action in place and on the ground, our housing market will remain stagnant and exclusive.”