House price growth will moderate into 2015, predicts Halifax

Homeowners less confident about further house price growth in next six months

House prices rose 0.6 per cent in September compared to August, according to Halifax's latest figures, making the average price of a house £187,188.

Over the last 12 months, prices have risen 9.6 per cent, and 2.7 per cent over the last three.

"The recent rapid rise in house prices in some parts of the UK, earnings growth that remains below consumer price inflation and the possibility of an interest rate rise over the coming months, appear to have tempered housing demand," said Martin Ellis, housing economist at Halifax. "This weakening in demand has led to a modest easing in both house price growth and sales.

"Annual house price inflation may have peaked around 10 per cent. A moderation in growth looks likely during the remainder of 2014 and into next year as supply and demand become increasingly better balanced."

"It's clear the exceptional rates of price growth we’ve seen this year can’t continue," said Andy Hatoum, co-founder of property search engine Placebuzz.com. "Demand is becoming more broad-based, and buyers more sensible in what they offer. With more choice available than we’ve seen in a long time, in many areas outside the capital prices are increasing at a sustainable rather than silly rate."

Meanwhile, homeowner confidence in the continued growth of UK house prices has fallen to a 15-month low, according to the latest Zoopla figures.

Its survey of 6,746 homeowners found that the proportion of homeowners expecting property prices in their area to increase over the next six months has fallen from 92 per cent three months ago to 88 per cent, the lowest level since July 2013.

"The property market signals are somewhat harder to decipher at the moment than they were a few months ago," said Lawrence Hall of Zoopla. "With the lengthier funding approval process following the Mortgage Market Review and fewer homeowners predicting that house prices will continue to rise in the short term, the coming months will be crucial to determine if the housing market recovery has stalled or simply paused for breath."

Figures out today from the Mortgage Advice Bureau suggest that the Help to Buy mortgage guarantee is helping homehunters buy a home with a smaller deposit.

"With average deposits totalling less than £10,000 in August, the scheme has made home ownership possible for many first-time buyers who otherwise would not have been able to buy in an environment of rising rents and increased house prices," said Brian Murphy, Head of Lending at Mortgage Advice Bureau .

"Crucially, it has also normalised higher loan-to-value lending, encouraging even those lenders who have not participated in the scheme to expand their 95 per cent mortgage offering. This brings greater product choice to consumers and allows more affordable options to take centre stage."