This month sees further evidence that the runaway house prices seen earlier this year are coming to an end

Ian Perry Royal Institution of Chartered Surveyors

The latest study by the Royal Institution of Chartered Surveyors (Rics) found that the rate of increase in house prices eased in the three months to July.

Rics said the difference between those surveyors reporting price rises to those seeing price falls fell to 53% last month, from 63% in June.

But Rics said that it was sticking by its forecast of a 19% rise in house prices for 2002 as a whole.

Recent surveys by the UK's biggest mortgage lenders have shown house prices rising at an annual rate of more than 20%.

And on Tuesday, figures from the Council of Mortgage Lenders (CML) showed that UK mortgage lending rose to record levels last month, suggesting that big house price rises were set to continue for some time.

Low interest rates have made larger mortgages more affordable, fuelling the housing boom.

Increased supply

The slowdown in house price inflation was put down to a slight rise in the number of properties available for homebuyers.

Rics said the number of properties on chartered surveyor estate agents' books rose to an average of 61 last month, compared with 56 properties in June.

"This month sees further evidence that the runaway house prices seen earlier this year are coming to an end," said Rics national housing market spokesman Ian Perry.

"While not exactly flooding on to the market, the number of houses and flats for sale has increased for the first time in eight months, easing pressure on price inflation.

"Sellers can no longer overprice and wait for the market to catch up, as buyers are becoming more 'streetwise' and looking for a good deal."