House prices rose at a strong pace last month despite declining market confidence, in a sign that a widely expected slowdown may take a few more months to emerge.

Nationwide said that prices rose by 1.1 per cent in October, as fast a pace as they had hit at any time this year. Over the year to October, prices were up 9.7 per cent, compared with a 9 per cent figure the month before.

The building society said that the increase, after several months of slowing prices, was unlikely to be the start of a new upward trend.

Fionnuala Earley, Nationwide’s chief economist, said: “Surveyors are reporting the weakest levels of new buyer inquiries in many years and mortgage approvals are falling . . . amid weaker demand and tighter lending criteria for riskier borrowers.”

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Evidence that the better-than-expected figures on the housing market are unlikely to last came yesterday from a survey of consumer sentiment, which showed that confidence has continued to fall in the aftermath of the run on Northern Rock. GfK’s measure of consumer confidence dropped to minus 8 in October, from minus 7 the previous month, to its lowest level since the end of 2005.

In a troubling signal for the high street, the sub-index that measures consumers’ willingness to make a big purchase fell to its lowest level since December 1995.

There were some positive aspects to the report. Confidence had been lower still, at a level of minus 9, in the two weeks immediately after the run on the mortgage lender. However, the figures cast doubt on whether consumers would want to continue spending beyond their means in the months ahead, casting a shadow over expectations.

— In a trading update, Taylor Wimpey, the builder, said it expected its annual profit margin to reach 14 per cent this year, despite worsening conditions in America and Britain.