House price growth remained flat in October following 15 consecutive months of increases.
According to the latest Nationwide House Price Index, house price growth remained unchanged on a monthly basis. This compared to a 0.3% rise in September.
As a result, the annual rate of house price growth fell from 5.3% to 4.6%.
The average price of a home fell from £206,015 to £205,904.
Robert Gardner, Nationwide’s chief economist, said that housing market activity remain fairly subdued, with residential property transactions 10% below the levels recorded in the same period last year.
He said this was a result of the introduction stamp duty on second homes introduced in April, where buyers brought forward transactions to avoid additional tax.
Gardner said: “Over the past three years, house prices increased by 20% while wages have risen by 6%. As a result, the typical house now costs six times average earnings.
“The steady decline in borrowing costs over the same period has helped to lessen the impact on affordability for home buyers. Indeed, the typical mortgage payment expressed as a share of average take home pay is little changed over the period and is still in line with the long-run average,”
Gardner said there was a significant variation across the regions in terms of affordability, with the cost of servicing the typical mortgage as a share of take home pay now above its 2007 peak in London.
“By contrast, housing appears far more affordable in northern England, Wales and Scotland,” he added.
House price growth has progressively slowed following April’s stamp duty hike after buyers brought forward transactions to beat the deadline.
The housing market has also been hit by uncertainty over the impact of the EU referendum, with many buyers adopting a more cautious approach and putting off purchases.
Jeremy Leaf, North London estate agent and a former RICS residential chairman, said: “These figures are no great surprise because they back up what has been said in other surveys identifying house price movements in the last few months. However, the figures do show that prices are still being supported by a shortage of property on the market which is forcing those buyers who are still keen to move to pay more than perhaps they may otherwise have wanted or expected to.
“Nevertheless, we are still finding that buyers and sellers have longer term confidence in the market and are pulling out all the stops where they can to take advantage of lower borrowing costs as many appreciate that they won’t be around for ever as inflation will inevitably take its toll.”
