Annual house price growth in October dropped to 1.6%, the lowest level on record since May 2013, according to the Nationwide Building Society.
It is the first time that annual growth has dropped below 2% in the same period.
The average house price was £214,534, and month-on-month house prices were flat, after accounting for seasonal effects.
The House Price Index revealed that the market was “still relatively subdued” but pointed to a recovery in first-time buyer numbers.
Robert Gardner, Nationwide’s chief economist, said: “This was broadly in line with our expectations, as the squeeze on household budgets and the uncertain economic outlook is likely to have dampened demand, even though borrowing costs remain low by historic standards and unemployment is at 40-year lows.
“We continue to expect house prices to rise by around 1% over the course of 2018.”
Gardner said future growth would be reliant on uncertain economic conditions. But he pointed to reduced squeeze on household incomes and policymakers’ indications of moderate rises in interest rates in coming years.
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