The Royal Institution of Chartered Surveyors (Rics) said the London property market was particularly affected by a heightened sense of caution following a strong signal from the Bank's governor, Mark Carney, that the Bank is prepared to act to cool the market if necessary.
Buyer demand for properties in the capital fell for a second month in June, Rics said, in its latest snapshot of the market.
Last month, Carney announced the first limits on the mortgage market in 30 years. Under the measures, the Bank will not allow lenders to extend more than 15% of their mortgages to customers needing to borrow four-and-a-half times their income.
Although he admitted the move would have no immediate impact, as no lender is currently at that ceiling, the Bank has calculated that it will start to have an impact if house prices rise more than 20% between now and the first quarter of 2017.
Simon Rubinsohn, Rics chief economist, said changes introduced in the Bank's mortgage market review – which requires lenders to apply stricter rules when assessing whether a borrower will be able to meet mortgage payments – were also having an impact.
He said: "The Bank of England's recent introduction of a ceiling on high loan-to-income lending and a 3% interest rate stress test is unlikely on its own to have an immediate influence on the market. However, rhetoric from key officials at the Bank, including Mark Carney, alongside the consequences of the introduction of the mortgage market review, are already slowing momentum, particularly in London.
"Buyer inquiries in the capital are now slipping back, which suggests that the very sharp upward move in prices will flatten over the coming months. Elsewhere around the country we believe the more hard-fought recovery should remain intact."
UK-wide, a balance of +53% of surveyors reported house price rises in June, slightly down on May's +56%. Rics said the strongest price gains were in the south east of England and Northern Ireland, but price growth eased in London.
Looking ahead, fewer surveyors in June were predicting house price rises over the next three months compared with May.
Meanwhile, Halifax reported a 0.6% drop in house prices in June, knocking the average price of a UK home down £1,100 to £183,462. It followed a sharp 4% rise in May.
The lender said that recent falls in buyer inquiries could also weigh on the market if they were sustained. Despite the fall in prices in June – the fourth drop since December – Halifax cautioned that monthly data could be volatile, and looking at longer-term movements in prices was a better indicator of trends.
UK houses prices rose by 2.3% in the three months to June compared with the three months to March, consistent with a 2% or higher quarterly rate of growth over the past year.
The annual rate of growth was 8.8% in June – the highest since October 2007 – the month after Northern Rock's financial woes triggered a run on the bank.
Rob Wood, economist at the German bank Berenberg, said there were signs that the UK housing market is stabilising. "The pace of increase is not slowing, but it has stabilised. Tighter regulations and the real chance of an interest rate hike this year have stabilised leading indicators and actual price inflation at current strong rates."
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