This month house prices have seen the largest dip in three years, says Nationwide.
During October they fell by 0.4 per cent, the biggest marginal decrease since February 2001.
A survey carried out by the building society revealed that the year-on-year growth in prices has plummeted to 15.3 per cent - down from 17.8 last month.
Average prices in the UK now stand at £152,159 - another decrease, down from July's peak of £154,299.
Nationwide's economist, Alex Bannister said: "This has been a period of marked deceleration in house price growth and is in part a result of 'real' factors, such as weak real take-home pay growth, rising interest rates and stretched affordability, acting as a drag on the market."
Nationwide added that the market is usually weak in the late summer/early autumn period; and while the survey appears to back up recent evidence of a cooling house market, it is ruling out the possibility of a market crash.
Indeed, Mr Bannister is optimistic about the future of the market: "Developments remain consistent with our view that over the coming years, house prices are more likely to grow at a very subdued rate rather than fall sharply."
He concluded by saying: "Our view is the current moderation in price growth expectations will not translate into widespread panic and that instead the market will experience subdued levels of turnover and price growth."To read more property news, click here.
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