Growth slowed in 10 of the UK’s 13 regions and fell from 0.7% to 0% on a monthly basis.
The South West was the strongest performing region, with prices up 12.5% annually during the third quarter of 2022, albeit down from 14.7% in the previous quarter.
Robert Gardner, chief economist for Nationwide, said: “This is the first month not to record a sequential rise since July 2021.
“There have been further signs of a slowdown in the market over the past month, with the number of mortgages approved for house purchase remaining below pre-pandemic levels and surveyors reporting a decline in new buyer enquiries.
“Nevertheless, the slowdown to date has been modest and, combined with a shortage of stock on the market, this has meant that price growth has remained firm.”
He said the Stamp Duty cut may provide some support for activity as long as the labour market remains strong, adding: “Headwinds are growing stronger suggesting the market will slow further in the months ahead.
“High inflation is exerting significant pressure on household budgets with consumer confidence declining to all-time lows.
“Housing affordability is becoming more stretched. Deposit requirements remain a major barrier, with a 10% deposit on a typical first-time buyer property equivalent to almost 60% of annual gross earnings – an all-time high.
“Moreover, the significant increase in prices in recent years. together with the significant increase in mortgage rates since the start of the year. have pushed the typical mortgage payment as a share of take-home pay well above the long-run average.”
Agency trade body Propertymark reported in response that supply and demand is increasing but buyers are taking more time on offers, with renegotiations expected.
Nathan Emerson, chief executive of Propertymark, said: “Sellers coming to market are still hoping to achieve the boost in prices we saw coming out of bidding wars last year. However, buyers are in a more sensible frame of mind and are taking their time over moving and budget decisions and we will see this effect prices being achieved.
"Our own data from our estate agent members across the UK shows the number of new homes and buyers coming to the market is up year-on-year which will underpin stability.
"With interest rate rises, we could start to see some re-negotiations if mortgage offers expire during the conveyancing process which is currently taking over 17 weeks on average.
"A trend of re-negotiation would start to soften house prices as those final sale prices are used by agents to create comparable evidence for the valuing of new properties entering the market.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “New buyers are pausing for breath while considering the likely pace and size of future interest rate hikes.
“There have been many gloomy predictions for the housing market over the past few days but we’re not seeing much change ‘on the ground’ at present.
“The mini-Budget sparked a chain reaction of unintended consequences, raising buyers’ concerns that any savings in stamp duty and other taxes will be more than offset by lender pressure to raise mortgage rates even faster than expected.”
Meanwhile, the Bank of England revealed last week that mortgage approvals climbed to 74,340 in August, up from 63,740 on the previous month and exceeding the 73,075 seen in August of last year.