This is down from 2.5% in September, resulting in the lowest rate since March 2013.
According to Halifax, house prices in the latest quarter were 0.2% higher than in the preceding three months, and rose by 0.7% on a monthly basis following two consecutive monthly falls.
Russell Galley, managing director at Halifax, said: “The annual rate of house price growth has fallen from 2.5% in September to 1.5% in October, which is the lowest rate of annual growth since March 2013. However, this remains within our forecast annual growth range of 0-3% for 2018.
House prices continue to be supported by the fact that the supply of new homes and existing properties available for sale remains low. Further house price support comes from an already high and improving employment rate and historically low mortgage rates which are creating higher rates of relative affordability. We see this continuing to be the case over the coming months and we remain supportive of our 0-3% forecast range.
Mark Readings, Founder and Managing Director of online estate agency, House Network, comments: "These figures are reflecting the lack of new stock coming onto the market, with many existing homeowners remaining cautious and not looking to sell their property until political uncertainty fades and the market stabilises.
The market fundamentals of low-interest rates and strong employment figures will eventually support growth in the market, which is why we remain positive that even coming to the end of the year we will see an uplift in 2019."
Mike Scott, chief property analyst at Yopa, commented: "The Halifax reports the slowest annual rate of house price growth for five years, at 1.5%. This closely matches the figure and trend published last week by the Nationwide. Prices for the three months from August to October were barely up on the preceding three month period at just 0.2%. The monthly figure recorded an increase of 0.7%, but this was a correction following consecutive monthly price falls in August and September.
This slowdown is unlikely to turn into an actual fall in the market in the short term, and the Halifax still expects the outcome for the year as a whole to be an increase of between 0 and 3%. The supply of homes is tight, mortgage interest rates are low, lenders are willing to lend, employment levels are high and average earnings are increasing. It will take a change in at least one of these factors, and probably in several of them, before we see any kind of sustained fall in house prices. However, with demand also weak and the numbers of house sales and mortgage approvals a few percent down on last year, we are equally unlikely to see a return to any kind of a house price boom."
