A 0.6% fall in the average house price last month does not signal a market crash, says lender Halifax.
August typically suffers from price deflation, and this year was no different.
Also, the lender's own index suggests prices have dropped one month out of every six in the past five years.
In that time the average house price has gone up by about 100% to the current £160,565, Halifax says.
However, August was the third month in a row to experience a slowdown or even fall in prices, indicating a trend has been set by reactions to rising interest rates.
Annualised inflation remains at 21.3%, but prices went up just 1.8% between June through August, and Halifax expects continued falls in the annualised rate of inflation through next year.
There is unlikely to be a market crash, the lender adds, because unemployment and interest rates both remain historically low, while the economy is seen as buoyant.
Price inflation will moderate through next year as further interest rate increases and continued difficulties for first time buyers act as a brake on the market, Halifax says.
UK GDP growth will slow from the current 3.7% rate to about 2.5% by next year, closer to the historical average, Halifax predicts.
This lower rate is still strong enough to maintain relatively high demand levels, while there are few signs the ongoing under-supply of housing will change.IFAonline
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