The bounding equity levels for homeowners seen early in the summer have slowed as house prices are cooling.  The slowing of demand for house purchases has been credited to many things but most of all the higher prices of property.  As prices bounded higher each month it started to put off buyers and soon the first time buyers began to decline.  It had been with their strong return to the market that the boom began.  Now with their departure it will surely stabilize and take away fears of a true economic housing bubble.

According to Halifax, the average price of a property in the UK rose to £187,188 in September.  The 0.6% increase in house prices reveals the decline in demand.  This is only slightly £1,000 above the average house price recorded for August.  In the three months to September house prices remained 2.7% higher than the preceding three months.  In a yearly comparison the same three months to September were 9.6% higher than the same time period in 2013.

Martin Ellis, chief economist for Halifax, remarked, “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.

“A moderation in growth looks likely during the remainder of 2014 and into next year as supply and demand become increasingly better balanced.”

House prices are expected to steady out and while they will sustain some growth, it is not expected they will exhibit the rapid ascent seen in the months past.