BBC News Online asked Barry Naisbitt, chief economist at Abbey National.

Do you think this is the first indication of a slowdown?

I think that these figures might be the first early signs of the market cooling down.

It is a question of timing, but it also one of having sufficient evidence - especially as the last few months have been rather atypical.

In terms of lending, we have seen a somewhat odd pattern in recent months - perhaps to do with the Jubilee celebrations and the World Cup.

The next two months will be crucial. What happens in them could prove significant for judging any slowdown in house price growth.

But is it too early to predict a slowdown?

It is, however, early days, and one might be in danger of reading something into these figures that is not there yet.

The slowing of house prices isn't just something that happens in one month - it happens over a period of time.

What economists will want to see is evidence that the process is happening.

Given that I think house price growth is going to slow, I think the next few months are quite crucial.

Only then will we know if there is a consistent picture overall.

My feeling is that in September we will be saying "yes, there is a slowdown in house price growth and house market activity".

Whether we start to see this over the next two months or later, it will eventually slow down.

Why will the housing market eventually slow down?

The nearer one gets to a peak in activity in any market, particularly the housing market, one sees that affordability becomes restrained for particular groups.

There is some evidence that we are near that peak period.

There is also an extra amount of economic uncertainty relating to the falls in equity prices and more uncertainty about job security.

I think these will be a tempering factor on activity levels as we go forward.

We will start seeing some people holding back.

Will the market crash?

I'm not very gloomy about the housing market's prospects.

I think by the end of next year annual house price growth will have slowed to about 4%, but I don't expect it to crash.

The reason? I still think there are some "fundamentals" that are strong for the market.

One is the shortage of properties, particularly in London and the South east.

We are building fewer new houses than we are creating new households.

Last year, we built less houses than any year since the war - that is helping to underpin house price growth.

Today's "boom" is not as much as a boom as the one in the late 1980s.

In 1988, for example, there were 2.1 million housing transactions, compared with only 1.5 million last year.

What about interest rates?

If interest rates went up it would be a very important factor for slowing down demand.

Some people who could manage to buy at current rates would think they could no longer afford to buy at higher rates.

However, if interest rates were to go up to 5% it would still be a full percentage point lower than they started last year, so it might not have a tremendous effect on the market.

Should I buy?

It's about your lifestyle - and how you want to live. For example, do you want to live in your own place? Are you happy to wait?

For some people it is very much a lifestyle thing.

The average time in a property is around seven years, so it is generally a long-term proposition.

But where you buy is very important. In London, for example, you need to be near tube or rail services.

Do you agree? Do you think the market is slowing down or do you think the boom will continue? Are you holding off buying? Tell us your experiences.

Your comments:

Myself and my fianc� are looking to buy in London, however despite just being able to stretch our finances to buy our first place, we are waiting to see what happens.

As with any commodity, even with low interest rates, there reaches a point where properties simply become unaffordable.

This point cannot be too far on the horizon and the boom cannot continue.

Who knows, maybe when property ceases to become an investment returning 20% a year, the much mentioned "shortage of properties" will be a thing of the past?
Dave Roscorla , England

Working at an Estate Agents in Norfolk I can verify that properties do seem to be taking longer to sell. Buyers are beginning to be more careful as to what they buy & at what price. I don�t think prices will fall in such a way as in 1988, but nobody can honesty say they know the answer to that. My advise to first time buyers who are finding it tough is to shop around and always try your luck with an offer! Make sure you would still be able to afford payments if interest rates do go up.
Lee, England

Britain's housing is a bubble, just as it was in Japan. In my local area in Tokyo, house prices have plummeted the last few years to a third or less of that ten years ago. Those who bought during high price times are stuck with a huge mortgage for a property worth much, much less. Their is little left of their disposable income after paying their mortgage. Worse, very long term (35-40 yrs) or even two generation mortgages mean that this problem will remain with them the rest of their lives. What is the point of pouring huge amounts of income into a highly over-valued and often sub-standard London house? Renting may seem like throwing your money away, but so is servicing the interest on a huge loan, where monthly repayments constitute over 95% interest on the loan. With renting there is a degree of freedom of mobility and more disposable income for an enjoyable life.
Robert Ridge, Japan (British ex-patriate)

I hope to buy in the next year or so when I return to London. There probably is some slow down, but relatively strong demand (or rather shortage of stock), plus reluctance to invest in the markets is sustaining the "boom".

But houses are generally poor value for money in London, relative to other parts of UK, and the continent. And I'd rather rent than spend �150k on complete rubbish, if that is my only option.
Bill Waller, Belgium

The real reason there is a shortage in the south is that people are unwilling to put their houses on the market before buying themselves, thus there appears to be a shortage, but it isn't really the case!
Christopher Cook, UK

As a would-be first-time buyer, I want to see a stop to this madness, but there is always somebody out there prepared to pay more than they can afford, which means the rest of us have to risk paying more than a property is worth.

I am not looking to make "a killing", I'm just sick of paying out thousands in rent, while friends of mine earn as much from their flat's increase in value as they do from their salary each year. This is no way to run an economy, or indeed a society.
George, Scotland

I sold my house last year and moved to Spain. It's sunnier here. When I sold I thought this can't go on. The price had more than doubled in less than 4 years. My belief is that the UK is re-enacting the year 1989, and that by the end of the year, prices WILL be on their way down. It will be subtle, in the South East first, the $2million houses will get the ball rolling, but there will be a knock on effect, and then it is anyone's guess where it will end up. Down 20%, maybe 40%. IMPOSSIBLE I hear you say. Only time will tell.
Chris Mance, Spain

The end must be in sight, it's a matter of what will be the trigger. It's unlikely to be interest rates, it's more likely to be a contraction in the service sector, which is the main underpin of the South. The U.S. is talking of 'double dip recession', and new housing 'starts'(building) are down here for the first time in years. If this blows across the pond then things will get tough for loads of folks who have paid over the odds for their home.
Chris, USA

I can understand buyers wondering whether to hold off or not. By itself the housing market will not crash. It will take a fundamental shift in the economy which will tip it over. One thing is for sure, you'll only know a crash is on the cards just after the event has started - no matter what the experts predict. If you're in a position like me (looking for a property) keep affordability in mind all the time.
Sanjayl, UK

Of-course there is a shortage of housing, it is all about supply and demand, but the shortage of housing is not rising at a rate of 20% per year. The market does not dictate that a house worth 100K 3 years ago is now worth 170K. The market (supply and demand) has not changed that much in 3 years. You would be a fool to buy now. Wait for two years, and get the same house for almost half it's current price. Rising unemployment, crashing stocks, failing companies, and the house market to continue to rise? Grow up! It's so obvious, it's so much common sense that a major correction is on the way, that it is flabbergasting.
Gareth Johnston, Switzerland

I am definitely holding back from committing myself to buying a house in London. It's all about demand and supply, and at the moment it�s a sellers market. I really don�t believe at this late stage, that if I bought a property today it would go up by 20% next year. The estate agents and some financial institution have got people panic buying. Obviously, there is a shortage of houses in the South east, just like 4 years ago. I'm no expert on the housing market, but what I do know is what goes up always comes down regardless.
Mark, UK

Even if there is a slow down in house price growth, the prices are still increasing at a slow pace. How can waiting help if there isn't a negative growth? I am a first time buyer and I feel awful about the whole situation. This morning I viewed a flat and the estate agent told me there were 6 other interested parties. I am not even sure offering the asking price will secure me a deal. I have been waiting for nearly 6 months and all I can see is the house prices going mad.
Victor, UK

Property like any other commodity is only worth what somebody is prepared to pay. Therefore one cannot blame the Sellers or estate agents or banks. If one is not prepared to pay that price then the property would not be sold. The price would have to come down, in order to sell. This in itself regulates the market. I do agree that not enough houses are being built, and therefore this is distorting the market, but with many workers fearful of their jobs, this should counter-balance this. As a property lawyer, I do believe the market will correct itself, and mostly this will come from interest rate rises. Once the stock market settles down, I am sure interest rates will rise, and maybe up to about 6% which would add 50% to interest payments.
Joe Kwok, London UK

I'd like to see the acres and acres of farmland that is lying fallow while attracting EU subsidies to be sold off to create new space for housing. Greenfield arguments obviously appear here, but it is important to remember that much of supposed "Greenfield" land is actually farming land that bears no resemblance to the forest/meadow that our countryside should be covered with - a field of mud is not contributing anything to society or the environment, a forest does, so does a bunch of houses.
Chris Jones, UK

Bring back council housing.
Mike Hemmings, England

I think the current house price boom won't stop until first-time buyers come to their senses and realise that a life spent paying for tiny flat no bigger than a space capsule just isn't worth it. If you are going to spend your entire life paying for it, what�s the difference from renting, and with renting you'll probably live in a much nicer place. This is the choice I have at the moment and frankly I think I have a better standard of life by accepting this.
Paul Smith, UK

I think London prices will flatten out in the next few months but prices elsewhere in the UK will continue rising, albeit more slowly than before.
Paul, UK

Whilst interest rates remain low, price inflation under control and the economy in reasonable shape I don't see a bust situation: however a couple of Interest rises resulting from a deterioration in economic numbers and affordability will have a keen impact, not just on housing, but consumer spending as well.
Brian Greene, UK

The housing market always starts to slow down at this time of year. It's holiday season, and I think people would rather enjoy their yearly holiday than move house.
Ben, United Kingdom

I think there are some signs of a slow down in the housing market, at least in the North East. Although not entirely to blame, I think estate agents are fuelling the price inflation. In desperation to get properties on to their books, they constantly overvalue. It appears that every time a house goes onto the market it is �5000 more than the same sort of house only a few weeks before. It's also a problem in once the owners are told a property is worth a certain they want to stick to it, even though it might take weeks and then they are forced to accept a lower offer. I'm sure sensible valuations would help to restore some stability to the market.
Mark Wilson, England