Halifax has reported that house prices in the three months from June to August 2014) were 3.0% higher than in the previous three months; this is down from 3.5% last month.

Prices in the three months to August were 9.7% higher than in the same three months a year earlier. This was lower than the annual rate of 10.2% in July.

House prices rose by 0.1% between July and August, continuing the fluctuating monthly movements recorded this year. There were five monthly price rises and three price falls in the first eight months of 2014. The quarter on quarter change is a more reliable indicator of the underlying trend, Halifax says.

Martin Ellis, Halifax housing economist, said: “Housing demand is supported by continuing economic recovery, growth in employment, improving consumer confidence and low mortgage rates. Nonetheless, earnings growth that remains below consumer price inflation, and the prospect of an interest rate rise at some point over the coming months, are likely to curb demand.

“There are some signs of an improvement in housing supply, both in terms of more second-hand properties coming onto the market and increased numbers of new homes. These trends, if sustained, should help to improve the balance between supply and demand, contributing to an easing in the pace of house price growth.”

“August saw a further cooling in the housing market, according to the Halifax, which is perhaps not surprising as it tends to be a quieter time of year,” said Mark Harris, chief executive of mortgage broker SPF Private Clients.

“However, the three month data also points to a less frenzied market, which is good news for buyers.

“The combination of more property coming up for sale and the prospect of an interest rate rise at some point in the future is applying the brakes to the runaway market. However, with a number of lenders reducing their two- and five-year fixed-rate mortgages in the past couple of weeks there are still some excellent deals available for buyers who are concerned about rate rises and want to lock in. Assuming you can meet stricter lending criteria, it could be a great opportunity.”