The average UK house price was £3,000 lower in October than a record high reached the previous month, according to official figures.
The typical property value in October was £268,000, down from a peak of £271,000 in September, the Office for National Statistics (ONS) said.
The stamp duty holiday in England and Northern Ireland, which had sparked a rush of buyers, ended from October.
House prices increased by 10.2% over the year to October, slowing down from 12.3% growth in September.
Average house prices in Wales increased over the year to a record level of £203,000 (15.5% annual growth), in England to £285,000 (9.8%), in Scotland to £181,000 (11.3%) and in Northern Ireland to £159,000 (10.7%).
ONS head of economic statistics Sam Beckett said: “Following last month’s record level of house prices, annual house price inflation slowed in October, with annual growth rates in England, Wales and Scotland all lower than in September.”
She added: “London continues to show the weakest annual growth, with the East Midlands performing strongest.”
Average prices in the East Midlands increased by 11.7% in the year to October.
House prices in London increased by 6.2% annually.
Despite having the lowest annual growth, London’s average house prices remain the most expensive of any region in the UK at an average of £516,000 in October.
The North East of England continues to have the lowest average house price at £148,000, the ONS said.
Jamie Durham, economist at PwC UK, said: “Higher inflation may impact consumer confidence, and limit their willingness to make major financial decisions like buying a house.”
Karen Noye, mortgage expert at wealth managers Quilter, said: “The next MPC (Bank of England Monetary Policy Committee) interest rate decision is set to be announced tomorrow.
“Despite being widely anticipated for so long, with the uncertainty surrounding the Omicron variant, the possibility of further restrictions and the potential negative impact on the economy, we are perhaps less likely to see a rise in interest rates just yet.”
She added: “An interest rate rise could potentially slow soaring house prices, but, while a rate rise is seemingly inevitable, there is no guarantee that it will come soon.
“Even if rates are hiked, supply versus demand issues remain so we would likely see a gradual slowing of growth as opposed to a sudden drop.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “With inflation soaring to a 10-year high, the pressure on the Bank to raise rates has notched up another level.
“However, historically the Committee rarely makes its move and raises rates in December, so the February meeting is a more likely option. This will also give the Bank time to see what impact the Omicron variant is having on economic activity.”
Lawrence Bowles, director of research at Savills, said: “We expect UK house price growth to continue easing through the tail end of the year, as the market slows in the run-up to Christmas.”
Nicky Stevenson, managing director at Fine & Country, said: “Though transaction levels have eased off following the giant spikes witnessed in the summer, new listings have failed to keep up with demand, meaning prices remain buoyant.”
Tom Bill, head of UK residential research at Knight Frank, said: “Gravity-defying price growth has been the result of low mortgage rates and tight supply, both of which we expect to reverse next year, increasing downwards pressure on prices.
“For now, the UK housing market is at a fork in the road.”