However, the figure is down from 3% recorded during September 2018 - driven mainly by a slowdown in the south and east of England and hitting the lowest annual rate since July 2013.
According to the report, the lowest annual growth in October was seen in the capital, where prices fell by 1.7% over the year.
House prices in England grew slower than other countries of the UK, increasing by 2.4% in the year to October 2018, down slightly from 2.6% in the year to September 2018.
At an English regional level, the North West showed the highest annual growth, with prices increasing by 4.9% in the year to October 2018, followed by Yorkshire and The Humber at 4.4%.
Paul Smith, CEO of haart estate agents, had this to say: “It’s very promising to see that house prices continued to grow in October, albeit at a slower rate.
Yes, prices in London have fallen but it’s important to remember that Londoners are still having to pay £146,824 more to buy a home than those in the South East (second highest house prices). And with prices in some cities and towns in the North West, Yorkshire and the Midlands soaring by as much as 11% - all signs point to house price correction rather than a market that’s collapsing.
It’s looking unlikely that 2019 will be plain sailing. But today’s market is well-insulated against any macro-financial situations that may come our way. The reality is that Britons will always need to move for a whole host of reasons – anything from being closer to good schools, new jobs and better transport links. The severe lack of new homes available to meet growing demand will always prop prices up.
Despite political turmoil, our branches are continuing to experience significant growth on the year in the number registering to buy (up 32% on the year). If the Government can get its act together in the coming weeks we can expect the market to shoot upwards in the New Year.”
Mike Scott, chief property analyst at Yopa, the low fixed-fee estate agent, says: "The latest official house price index shows a monthly fall in house prices of 0.2 per cent for October, but with the annual rate of increase still running at 2.4 per cent.
This is more optimistic than other recent reports, because it uses older data. The house sales that completed in October will have been agreed and had their mortgages approved around June, when other reports were showing a similar year-on-year rate of growth. We therefore expect that the official index will see further falls in the next few months, with the annual rate of growth falling to around 1 per cent by the time of the February report, which will be published in April next year.
London is the worst-performing region compared to October 2017, with a fall of 1.7 per cent over the year. This is entirely due to a fall of nearly 3 per cent in the average price of London flats, with the prices of houses remaining almost unchanged. The fall is also concentrated in Inner London, which saw a year-on-year drop of 2.9 per cent compared with just 0.2 per cent in Outer London. Unlike the national figure, we do not expect to see a further slowdown in the London market over the next few months' figures, as other reports suggest that the London housing market has been bottoming out."
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: "Although very comprehensive, these numbers are a little historic and provide a snapshot of the market in the period leading up to the autumn. They confirm what’s been happening before and since - that price falls in the London area are masking some resilience in the rest of the UK and that transaction numbers are holding up reasonably well. However, overall, prospects for the new year are not good as all the recent Brexit and general economic uncertainty are not reflected in these statistics.
On the ground, December is proving to be fairly typical - generally quiet but still, thankfully, a fair number of buyers who need to move checking out what they consider are the best value options."
John Goodall, CEO and co-founder of buy-to-let specialist Landbay, said: “Amidst a volatile political and economic landscape, the hesitance of buyers and sellers to act is completely understandable. Combine this with the traditional seasonal slowdown, alongside historically low levels of transactions, and stagnant house price growth really is no surprise. As we wait to see how Brexit uncertainty unravels, the private rental sector will play a more important economic role than ever as it provides flexibility and value to renters and landlords alike.”
