Nationwide’s House Price Index shows property prices in London fell by a modest 0.7% year-on-year, the fifth quarter in a row prices have fallen. But prices are only 3% below their 2017 peak and still more than 50% above their pre-credit crunch levels.

In contrast, Yorkshire and Humberside was the top performing region for the first time since 2005, with annual price growth picking up to 5.8%. The average property price here is now £160,263.

The East Midlands also continued to see relatively strong growth, with prices up 4.8% year-on-year.

The Outer Metropolitan, London and North all saw small year-on-year price falls, with the North the weakest performing region with prices down 1.7% year-on-year. The average house price here stands at £125,085.

Across the country, UK annual house price growth was stable in September at 2%.

Robert Gardner, Nationwide’s chief economist, said: “Looking further ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates.

“Subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year, though borrowing costs are likely to remain low.

“Overall, we continue to expect house prices to rise by around 1% over the course of 2018.”

James Newbery, investment Manager at property investment platform British Pearl, said: “What’s striking is that we are still a nation divided. Growth since the financial crisis has been incredibly uneven with many regions still struggling to get back to where they began whereas London has powered ahead.

“That means there are still opportunities out there but they must be chosen carefully.

“What’s significant is that even in the market that has cooled the most — London — prices are still very close to all-time highs.”

Brian Murphy, head of lending at the Mortgage Advice Bureau, said: “These figures should provide a degree of reassurance, as they appear to point towards the housing market continuing to function at a healthy level so far this year, despite the ongoing political and economic headwinds.”