The price of property in the UK has increased by 12.6% over the last year with the average now sitting at just below £300,000.

The latest House Price Index figures from the Office for National Statistics show the monthly increase was minimal however, at just 0.3%.

Property actually fell in London month-on-month in October, making the capital the only region in the UK to report a decline.

Prices in the city dropped 0.9% compared with September. In contrast, prices rose by at least 0.9% in the north-east of England, West Midlands and Scotland.

Lawrence Bowles, director of research at Savills, said the decline in London could be explained by the capital being far more reliant on mortgage debt than the rest of the country, with average loan-to-income ratios and total mortgage costs far higher.

He commented: “Affordability constraints are the number one reason why London’s house prices are underperforming the UK in the latest data,” he said, adding: “That means London house prices are more sensitive to changes in interest rates than elsewhere in the UK.”

Tom Bill, head of UK residential research at Knight Frank, said he expected affordability constraints would result in property prices in the capital underperforming “the rest of the country over the next three to five years”.

Jeremy Leaf, north London estate agent, said at first glance, this most comprehensive of all the housing market surveys seems to demonstrate considerable resilience. However, digging a little deeper, these numbers reflect what was happening in late summer and early autumn, not what we’ve been seeing in our offices since.

He commented: “Most demand, fuelled by mortgages arranged on more advantageous terms, seems to have been satisfied. A better test will come in early 2023 when a large proportion of buyers have to decide whether they will continue to press the pause button or review their searches in response to lower mortgage rates and inflation figures.”

Andy Sommerville, director at Search Acumen, urges people to take a slight statistical anomaly into consideration, as it shows that we have now entered a period of house price decline.

“October’s figures show an increase in house price growth annually, but this is largely because the data compares against October 2021, when house prices uncharacteristically fell, against the overall growth trend at the time, because the pandemic SDLT holiday came to an end,” he explained.

Jason Tebb, CEO of OnTheMarket, highlights that the rebalancing of the market continues, as double-digit inflation, rising interest rates and the higher cost of living inevitably impact the confidence of the average property-seeker.

“Experienced local agents will increasingly come into their own in terms of pricing property realistically, ensuring a successful transaction in a tougher market,” he said.

Nick Leeming, chairman of Jackson-Stops, expects momentum to remain subdued until the beginning of 2023 as part of a seasonal drop in activity levels combined with the continued effects the mini-Budget and rising interest rates.

“Thanks to a combination of low housing supply, high levels of housing equity and a high proportion of fixed-rate mortgages, a soft landing for house prices appears likely in the first quarter of 2023,” he said.