House prices in October 2009 are 2% higher than the same month last year.

According to UK building society Nationwide, house prices increased by 2% annually in October – the first annual rise for 19 months.

The monthly rate of growth is however is slowing down, with a 0.4% increase in October compared with the 0.9% in September.

The average price of a house in the UK has risen to £162,038 in October, up from £161,816 a month earlier.

Despite the first annual rise in house prices since March 2008, Nationwide believes that the values could level out in coming months.

Martin Gahbauer, Nationwide’s Chief Economist, said: “House prices rose for the sixth consecutive month in October, but the strong upward momentum in property values seen over the summer is showing some signs of moderating as we head into the autumn months.

“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.”

The main reason attributed to the rise in house prices is the lack of properties on the market and increased affordability attracting more potential house buyers.

Earlier this month, an official report from the Office for National Statistics (ONS) demonstrated that the UK is still in recession and the poor GDP figures have mixed implications for the housing market.

Nationwide states that a longer recession implies rising levels of unemployment but could also mean that interest levels remain low, improving affordability. The future of the UK housing market remains uncertain.