Signs that the housing market is set to cool off began to emerge yesterday as Nationwide found that monthly prices increased just 0.3 per cent this month, the lowest monthly rise for eight months.
Annual house price inflation is now running at 9.3 per cent according to the research, down from December's 10.5 per cent.
Experts believe that the main reason for this easing in prices is the three interest rate rises in the last six months is beginning to tighten homeowners' finances and ward off potential first-time buyers.
Fionnuala Earley, Nationwide's chief economist emphasised that the figures were a result of a number of factors, all pointing to a slowdown in the property market.
"Estate agents reported some easing of demand in December and January," she said. "The number of newly agreed sales is rising more slowly and the length of time properties are on the market seems to be getting longer.
"More importantly, new buyer enquiries recorded their first fall in 19 months.
"While the correlation with mortgage approvals is not perfect, it suggests that the 129,000 house purchase approvals recorded in November may have been the peak."
She added: "It is an extremely close call between rates remaining unchanged and rising once more."
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