House prices made a surprise lurch upwards last month as sellers decided to bide their time rather than sell at lower prices, according to a closely-watched survey.
On a month-to-month basis, prices in October were up 0.9pc compared following a 0.1pc monthly rise in September, according to the Nationwide house price index.
Analysts had expected prices to fall of 0.4pc.
It meant the annual fall in house prices was cut to 3.3pc, although this remains the ninth month in a row that the figure has fallen as mortgage approvals plummet.
The series of annual falls that began in February leaves the average house price at £259,423.
Nationwide’s chief economist Robert Gardner said: “The uptick in house prices in October most likely reflects the fact that the supply of properties on the market is constrained.
“There is little sign of forced selling, which would exert downward pressure on prices, as labour market conditions are solid and mortgage arrears are at historically low levels.”
The latest figures from the Bank of England showed mortgage lending tumbled in September as higher interest rates hammered would-be home buyers.
Banks approved 43,300 mortgages during the month, the lowest number since January when the market was reeling in the wake of the mini-Budget and the crunch in gilt markets which followed.
Read the latest updates below.