House price rises dropped from 9.5% growth in September to 7.2% growth in October, show new figures from Nationwide.

And on a monthly basis, prices fell 0.9%, which is the first drop recorded since July 2021 and the most significant move in this direction since June 2020.

This means that the average house is now valued at £268,282.

“The market has undoubtedly been impacted by the turmoil following the mini-Budget, which led to a sharp rise in market interest rates. Higher borrowing costs have added to stretched housing affordability at a time when household finances are already under pressure from high inflation,” says Nationwide chief economist Robert Gardner.

He expect the interest rate to rise further “as the Bank of England seeks to ensure demand in the economy slows to relieve domestic price pressures.”

SPF Private Clients chief executive Mark Harris comments: “Swap rates have calmed since the furore of the fallout of the mini-Budget, with two-year money easing by more than 100 basis points over the past month. Some fixed-rate mortgage pricing has dropped accordingly over the past few days, with Barclays, HSBC and Santander, among others, reducing their rates.

“With a 75 basis points base rate rise forecast later this week, borrowers will be wondering whether prices of new mortgages will edge up again. However, while base rate may not peak at 3 per cent, rates may not need to go much higher now that Rishi Sunak has brought some stability.

“Borrowers have been opting for tracker or variable mortgages over the past month, with medium and long-term fixes already falling and expected to fall further.”

And Dashly founder Ross Boyd says: “To say the outlook is uncertain is an understatement. With inflation where it is, and mortgage rates on a different plane to where they were just six months ago, 2023 could be like 2008 all over again for the property market.

“Another rate rise to control inflation could further reduce demand for property, putting prices under real pressure. Those people who are currently locked into some of the lowest mortgage rates ever will be in for a profound shock when they come to remortgage, as they are already under pressure due to the cost of living crisis and soaring energy bills.

“The short-term outlook for the property market may be savage but, as ever with bricks and mortar, at some point things will bounce back.”