The Nationwide Building Society has reported that annual house price growth remained elevated in October at 9.9%, albeit marginally lower than the 10.0% recorded in September.

Prices rose 0.7% in month-on-month terms, after taking account of seasonal effects. The price of a typical UK home has now passed the £250,000 mark, an increase of £30,728 since the pandemic struck in March 2020.

The UK’s largest building society said that demand for homes has remained strong, despite the expiry of the stamp duty holiday at the end of September. Indeed, mortgage applications remained robust at 72,645 in September, more than 10% above the monthly average recorded in 2019. Combined with a lack of homes on the market, this helps to explain why price growth has remained robust, it added.

Robert Gardner, Nationwide’s chief economist, said: “The outlook remains extremely uncertain. If the labour market remains resilient, conditions may stay fairly buoyant in the coming months – especially as the market continues to have momentum and there is scope for ongoing shifts in housing preferences as a result of the pandemic to continue to support activity.

“However, a number of factors suggest the pace of activity may slow. It is still unclear how the wider economy will respond to the withdrawal of government support measures. Consumer confidence has weakened in recent months, partly as a result of a sharp increase in the cost of living.

“Even if wider economic conditions continue to improve, rising interest rates may exert a cooling influence on the market, though the impact on existing borrowers is likely to be modest.”

Jonathan Hopper, CEO of Garrington Property Finders, added: “A boom that many predicted would burn itself out is still in full flow despite the end of the stamp duty holiday.

“While on the front line we’re seeing some asking prices being reduced as the market begins to normalise, monthly price growth in October actually accelerated, doing the exact opposite of what might have been expected after the end of the Chancellor’s tax incentives.

“The white heat of price inflation seen for much of this year is still creating sleepless nights in Threadneedle St.

“Money markets are increasingly bringing forward their predictions of rate rises but even if a string of small adjustments do happen, loss of price momentum is likely to still be gradual. In most areas it will be a case of things ‘calming down’ rather than ‘going down’.

“There are still thousands of would-be buyers and the market remains broadly in good health but an increasing number of house hunters are starting to find they have the will, if not quite the way, to buy.

“The chronic shortage of homes for sale is the most obvious problem. But with average house prices hitting ten times average earnings in hotspots like Oxford, Cambridge and Bristol, first-time buyers are seeing their affordability stretched to breaking point. And with mortgage rates starting to creep up, some buyers are pausing for thought – and this is forcing sellers to recalibrate.”