Hometrack's monthly national survey for August 2002 has revealed that house price inflation has fallen to 0.7%, the lowest rate since January this year.
But this still represents 8 times the current monthly retail price inflation rate.
The survey has also revealed that house price rises are averaging 0.7%.
Following a 2.6% rise in May, the fastest monthly rise so far this year, price increases have been slowing down overthe last three months. One key reason for this is the quieter 'holiday season' but it also reflects a move back towards normality after clearly unsustainable rates of inflation over the last six months.
Price increases continued in all major regions, counties and cities this month with the strongest rises reported in South Yorkshire (1.9%), Nottinghamshire (1.8%), South Lincolnshire (1.8%) and Isle of Wight (1.7%).
At the other end of the scale, only very slight increases were reported in the relatively expensive areas of Central and City of London (0.2%), Berkshire (0.2%), and Oxfordshire (0.3%).
John Wriglesworth, Hometrack's housing economist, comments: “The housing market has had a reality check and price rises have slowed down to more sustainable rates. While the slowdown has been marked over recent months, this is partly seasonal.
“Continuing record low mortgage rates, rising incomes, and a shortage of supply point to further price rises, albeit at a more modest rate. The boom continues and I am confident that there will beno nineties style housing market recession. We are keeping our forecast of 20% house price inflation for this year and 8% for 2003.”