This left house prices 1.7% lower than they were a year ago.
However there has been modest rise in mortgage approvals continues. The industry-wide number of mortgages approved to finance house purchase - a leading indicator of completed house sales – increased for the third successive month in September. Approvals increased by 4% to 50,000 in September, but were still 2% lower
Martin Ellis, housing economist, said: "Signs of a modest deterioration in the trend in house prices continued in October. Prices in the three months to October were 1.2% lower than in the preceding three months.
"The weak economic background has been a key factor dampening housing demand this year. Recent encouraging developments relating to the level of overall economic activity and conditions in the labour market, however, may help to support demand and underpin house prices around current levels over the coming months."
Jonathan Samuels, CEO, Dragonfly Property Finance, said :"The property market remains on the back foot in a what is a wholly underwhelming economic climate.
"Yes, we have exited recession but it seems overly optimistic to hope that this will suddenly trigger renewed confidence among prospective purchasers.
"I expect there to be a sizeable lag between the economy picking up and consumer confidence returning.
"Caution is catching and it can take a long time to shake off. Even if the economy continues to improve and confidence grows, the question then is whether the banks will lend in any material way to higher LTV borrowers?
"To date, they have shown very little appetite, despite the Funding for Lending scheme. Until there is greater movement at the bottom end of the property ladder, the property market will remain in a state of limbo.
"Certain areas of the UK, most notably prime London, could continue to outperform but for most of the UK it is looking like an indifferent 2013."
