It was predicted earlier this month that 2015 will be a period when fast-rising property prices from 2014 start to cool off, with much of the UK seeing static or falling prices throughout next year. It may sound like bad news for house prices to fall, but in the long-term it is only good for the market as a whole, and it seems that this is happening already.
Gradual reductions in house prices after quick rises are indicative of a property sector that is able to manage its own situation, and it staves off fears of a quick correction - often known as a housing bubble. By the end of this year, annual price increases look set to hit almost eight per cent - more than double the rate seen last year.
However, the Centre for Economics and Business Research (CEBR) predicts that the market will regulate itself and slowly reduce prices throughout 2015 before they start to rise again in 2016. And looking at figures from recent months, it seems the market may already be regulating itself.
The latest report released from the Royal Institution of Chartered Surveyors (RICS) shows that the momentum of house price rises slowed in September, falling back to a rate that was last witnessed in June 2013. So while prices are still climbing, the sector is starting to ease off, which can only be seen as a positive moving forward.
In addition to this, the latest Halifax house price index shows a similar trend. It said that in the three months to the end of September, house prices rose by 2.7 per cent. Again, while this is still capital appreciation for homeowners - always a positive - it is also a move in the direction of maturing.
The 2.7 per cent rise marked the second successive quarter wherein the rate of house price rises fell.
So what's the reason for this drop in the rate of rises? According to RICS, it could boil down to the fact there are fewer buyers coming to the market. It's no secret that more and more young people are now looking to rent than buy, and new regulations could also be having an effect on this reality.
In April this year, new Mortgage Market Review rules that require mortgage lenders to do more stringent affordability tests on applicants were brought in. This was a move to make sure that loans were not being handed out unsustainably. The rules stop prices from ballooning to levels that cannot be kept, and this sees prices fall drastically.
The introduction of these rules has made it harder for newcomers to get themselves onto the ladder, and RICS believes that this could be behind the slowing of price rises. It reports that in September, new buyer numbers dropped for the third-consecutive month.
Simon Rubinsohn, RICS chief economist, said: "Demand and supply are looking a little more balanced, which is removing some of the upward pressure in prices, particularly in London." He went on to add that this is "a healthy development".
Martin Ellis, housing economist at Halifax, said: "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 ten 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."