The latest survey of UK house prices has suggested that the first signs of a slowdown in the property market are appearing.

The Royal Institution of Chartered Surveyors (RICS) said that while house prices are still continuing their upward trend, the rate of increase had stabilised for the first time in three months.

Earlier this month, house price data from the Halifax bank showed house prices rising by 4.2% during May - the fastest rate since records began in 1983.

The news had raised fears that the housing market was getting out of control, and that house prices could be heading for a crash similar to the one seen in the early 1990s.

Housing shortage

RICS said the main factor behind the rise in prices was a shortage of properties.

The average number of properties per surveyor fell for the third month in a row.

RICS said the market was likely to hold steady over the next few months, as the effects of the Jubilee celebrations, the World Cup and the summer holiday period slowed sales.

"The summer months are traditionally a quieter period as people focus on holidays.

"The first signs are appearing that the housing market may be losing some of its heat and heading, if not for a slowdown, then at least for a period of stability," said the RICS national housing spokesman, Ian Perry.

"The market does need this as it will greatly help the first time buyer who has been finding it difficult to keep up with rapidly rising prices and competition from the buy-to-let sector."

Warnings

Last week the Bank of England's deputy governor David Clementi warned that the current rate of increase in house prices was not sustainable.

He warned that if high levels of borrowing continued, the price adjustment could be "quite severe".

And on Tuesday, the chairman of the UK's Financial Services Authority, Sir Howard Davies, told the BBC he was concerned at the high borrowing levels in some parts of the country.

He said some people may "live to regret" the large mortgages they have taken out in the current housing boom.

And he said he would not be surprised if there was downturn in house prices in London and the South East of England.