Residential property prices increased at the slowest rate in five months in August, according to Knight Frank and Markit's latest House Price Sentiment Index (HPSI).
Households in all regions covered perceived that the value of their properties rose in August, but at the slowest rate since March.
Additionally, there was a rise in expectations for future home price growth, but the outlook for capital gains still remain substantially lower than the record-high recoded in May.
Households in the South East expect prices to rise the most over the next 12 months, the third consecutive month expectations in this region have been higher than London.
The report also showed that 28.9% of the 1,500 households surveyed across the UK said that the value of their residential poperty had risen over the last month, while 5.3% reported a price fall.
This gave the HPSI a reading of 61.8, the 17th consecutive month that the reading has been above 50. Nevertheless, the reading was down on the 62.4 achieved in July and was the third consecutive month that households' perceptions about house price growth have moderated.
Any figure that is more than 50 indicates that prices are felt to be increasing, and the higher the figure the more significant the rise. Any figure below 50 suggests that prices are felt to be dropping.
"A third consecutive monthly decline in the house price sentiment index suggests that the price exuberance seen in some corners of the market is easing," said Gráinne Gilmore, head of UK residential research at Knight Frank. "This comes amid increasing discussion about interest rate rises, which are likely to materialise within the next six to nine 9 months. Recent changes to the rules surrounding mortgage lending are also likely having an impact on market sentiment."
While the HPSI reading for London, where average house prices have seen the biggest increase in the last year, showed a slight increase in August, this was far overshadowed by the rise seen in the North East and North West of England.
These regions are starting to experience some level of sustained house price growth amid growing buyer confidence," Gilmore added.