UK house prices witnessed a year-on-year rise in October, the first annual increase for 18 months new figures revealed.

According to Nationwide Building Society, property prices were up by 2% in October compared to the same period last year.

The average value of a house rose to £162,038 following increases over the past six months.

But the monthly growth recorded during the month was 0.4%, which was down from 0.9% in September and 1.4% in both July and August.

The building society said that the ease in the monthly pace of increase, indicates that more properties are coming on to the market.

Martin Gahbauer, Nationwide's chief economist, said: "A moderation in the rate of house price inflation was to be expected, as the very strong monthly increases seen over the summer months were unlikely to be sustainable over the long run."

He added: "Although too early to tell for sure, it may also reflect a more natural level of stock available for sale coming to the market, alleviating some of the extreme shortages of property on the market seen during most of this year."

The latest figures are consistent with the recent borrowing data released that showed a slowdown in activity, with net mortgage lending last month - up by £922 million - easing in comparison with August.

Nationwide warned the UK's failure to lift out of recession in the third quarter may further hamper the housing market recovery.

A deeper and longer recession could lead to higher unemployment and subdued wages, which could hit property prices, according to the group.

But the fall in third quarter gross domestic product has also increased the likelihood that interest rates will stay low for some time in a possible boost to property conditions.

"As a result, mortgage affordability will remain relatively favourable for both new and existing borrowers - this should limit the number of distressed sales and cushion the negative impact of labour market weakness on housing demand," said Mr Gahbauer.

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