The latest house price index from Halifax found that house prices in the three-month period from August to October were 0.8% higher than in the previous three months.

Martin Ellis, Halifax’s housing economist, said: “This was the third consecutive decline in the quarterly rate of increase and the smallest rise since December 2012. Annual price growth in the three months to October slowed to 8.8% from 9.6% in September.

“Activity continues to decline with mortgage approvals in September falling for the third successive month to a 14 month low, whilst home sales are at their lowest level since October 2013. The associated weakening in demand has brought supply and demand into better balance.

“The economy is, however, continuing to grow at a healthy pace and employment is still rising. These factors should support housing demand over the coming months. However, while the chances of an imminent interest rate hike may have receded, a recent Halifax survey found that many borrowers are concerned about the impact a rise could have on their monthly mortgage repayments over the next 12 months. This concern is likely to curb buying intentions.”

“These figures show that the house prices are steadying and we are not seeing the huge leaps in prices we saw at the beginning of the year,” said Stephen Smith, director at Legal & General Mortgage Club and Housing.

“Although this may feel like the housing market is slowing down it is important to remember that the past year has seen an annual increase of 8.8%. This level of growth is not sustainable. House prices need to grow at a similar rate to wage inflation for the market to be stable and healthy in the long term.

“There is a danger if things continue as they are that people will get priced out of the market To continue to grow sustainably, we need to be building more houses as demand still outstrips supply. However, as we approach the general election, it is good to see this issue moving towards the top of the political agenda.”