Annual house price growth holds steady at 2%: Nationwide

However regional house price developments were more varied, with London prices falling for the fifth quarter in a low and the North becoming the weakest performing region with prices down 1.7% year-on-year.

Yorkshire and Humberside was the strongest performing region in England, and also the UK, with prices up 5.8% year on year. The East Midlands also continued to see relatively strong growth, with prices up 4.8% year-on-year.

Northern Ireland saw a pick up in annual price growth to 4.3% and was the best performing amongst the home nations. Wales saw a slight softening in growth, with prices up 3.3% year on year. Price growth also slowed in Scotland, from 3.1% in Q2 to 2.1%.

England was again the weakest performing nation, with prices up 1.4% year on year.

Jeremy Leaf, north London estate agent and former RICS residential chairman, commented: "These numbers are actually quite good news because they show a fairly steady market after house prices fell by their largest amount in six years in August. Once again, we are finding that the market continues to be supported by a shortage of stock and low mortgage rates, as well as new buyers returning from holiday keen to take advantage of some more realistic pricing.

"It is a mixed bag, however, because activity and prices in London remain challenging whereas in many places outside it is quite a different picture. This is mainly due to historic affordability reasons, particularly when this well-respected index confirms London prices are still more than 50% above their 2007 peak."

Mike Scott, chief property analyst at Yopa, added: "Nationwide reports steady annual house price growth at 2% in September. It now seems very likely that the growth rate for the year as a whole will come in at around that level, beating Nationwide’s forecast of 1%.

"As we move into next year, prices are likely to continue to rise at this rate, roughly in line with inflation, with supply and demand in balance. Since housing supply only changes very slowly, it will take an increase or decrease in demand to realign the market and get prices rising faster, or slowing down and falling."