The housing market could be showing the first signs of slowing down, the latest Nationwide house price index reveals.

House price growth fell from 10% in August to 9.5% in September, as 10 out of 13 regions recorded a slowdown in the third quarter.

London reported the weakest figures with growth rising slightly from 6% to 6.7%. The South West was the strongest area with prices up 12.5%, although still down from 14.7%.

Robert Gardner, Nationwide’s chief economist, says: “In September, annual house price growth slowed to single digits for the first time since October last year although, at 9.5%, the pace of increase remained robust

“There have been further signs of a slowdown in the market over the past month, with the number of mortgages approved for house purchase remaining below pre-pandemic levels and surveyors reporting a decline in new buyer enquiries.

“Nevertheless, the slowdown to date has been modest and, combined with a shortage of stock on the market, this has meant that price growth has remained firm.”

Industry reaction

Nathan Emerson, CEO of Propertymark, says: “Sellers coming to market are still hoping to achieve the boost in prices we saw coming out of bidding wars last year. However, buyers are in a more sensible frame of mind and are taking their time over moving and budget decisions, and we will see this affect prices being achieved.

“Our own data from our estate agent members across the UK shows the number of new homes and buyers coming to the market is up year-on-year which will underpin stability.”

Jason Tebb, CEO of OnTheMarket.com, says: “With annual house price growth showing a modest slowdown in September, moving into single digits for the first time since October last year, the inevitable rebalancing of the market continues.

“With the Mini-Budget falling towards the end of the month, the reaction to it has not yet had an impact on these figures. It is clear however that housing affordability is becoming more stretched for many buyers.”

“New buyers are pausing for breath while considering the likely pace and size of future interest rate hikes.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “New buyers are pausing for breath while considering the likely pace and size of future interest rate hikes.

“There have been many gloomy predictions for the housing market over the past few days, but we’re not seeing much change ‘on the ground’ at present.”