The national housing market slowed significantly in September, hit by the credit squeeze and the delayed impact of interest rate rises, according to the Financial Times house price index published on Friday.

Prices in England and Wales grew 0.3 per cent in September compared with 0.4 per cent in August and 0.6 per cent in March. The annual growth rate fell to 8.8 per cent from 9.4 per cent in August, taking the cost of the average home to £225,826.