The six-month rally in the housing market lost momentum last month, but prices are still rising.

Nationwide said that the monthly rate of increase slowed from 0.9 per cent in September to 0.4 per cent in October, taking the average house price to £162,038. The monthly rise pushed the annual house price growth figure into positive territory for the first time since March 2008, reflecting six months of positive gains.

The three-month rate of change, which is regarded as a more reliable indicator of long-term price trends, dropped back from 3.8 per cent to 3.4 per cent.

Nationwide’s figures came as signs of a decline in demand from homebuyers begins to emerge. Estate agents have attributed this to a seasonal slowdown in the run-up to Christmas.

Separate data from Hometrack, the market analysts, published on Monday, is expected to show demand has plummeted in response to the lack of stock on the market.

Martin Gahbauer, chief economist for Nationwide, said: “A moderation in the rate of house price inflation was to be expected, as the strong monthly increases over the summer were unlikely to be sustainable. Slower house price inflation is also consistent with developments in housing market activity, as industry figures have shown that the pick-up in mortgage approvals for house purchases has lost some momentum in recent months.”

Nationwide said that recent official figures showing an unexpected fall in GDP in the third quarter would have mixed implications for the housing market. It said that higher unemployment would dampen demand, but that the likelihood of interest rates remaining low would result in better mortgage affordability.