According to the latest Halifax House Price Index, house prices have now risen for nine consecutive months, but there has been a slowdown in the rate of increase, with October showing a 0.7% gain compared to increases of 2% to 2.1% in the previous four months.

The value of the average home now stands at £171,991. Activity in the property market is hotting up, with the number of transactions carried out between July and September this year up 21% on the same period last year.

The number of mortgage approvals, a reliable forward indicator of completed property sales, was 11% higher in the third quarter (Q3) of the year than the second.

However, overall property transaction levels remain significantly below their pre-crash peak, with sales in Q3 2013 still 36% lower than Q3 2006. Mortgage affordability is helping to boost demand, with typical monthly payments for a new borrower accounting for 27% of disposable income in Q3, the lowest proportion since Q2 1999, and well below the 30-year average of 36%.

Nicholas Ayre, managing director of homebuying agency Home Fusion, said:

“While October figures are still moving ahead and are higher than the previous three months, what we are also seeing is a growth slowdown on a quarterly basis.

“There may be a ‘press-commentary-effect’ here, where people are taking note of what is being said in the press about a housing bubble and then thinking twice before jumping in. That said, we are also entering a quieter phase for the market, with December traditionally a subdued month for housing transactions. So sellers may well be thinking ‘let’s get on with things’ before the December period and get our house sold.

“There are also indications that supply may well be waking up to demand, with house builders starting to snap up land for building. What may have been a marginal plot of land to develop up until now, may well be looking more profitable as prices rise. A two-bed house which may have only been worth £250,000 a while back, but which may be worth over £300,000 now, would look far more enticing in terms of profitability. So builders seem to be stepping up to the plate, which will all help with the supply-side of the equation.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, added:

“Affordability is not an issue for buyers – yet – with the low level of mortgage payments in relation to income helping boost demand. This is encouraging as it suggests buyers are not over-stretching themselves but if demand continues to soar and supply can’t keep up, it could become an issue. This would affect first-time buyers in particular, which are so crucial to the health of the housing market. We are just seeing their numbers start to recover over the past few months: it would be a disaster if they were priced out of the housing market all over again.

“The ultra-low interest rates we have seen in recent months show no signs of abating. Lenders have business to do before the end of the year which will ensure they continue to offer competitive deals. Help to Buy has stoked interest in the market but with lenders increasingly offering high loan-to-value deals outside of the government scheme, there is a range of options available for buyers.”