The UK housing market appears to be slowing down, amid concerns that turmoil in the world's financial markets is spilling over into the UK economy.

Property website Rightmove recorded a mere 0.6 per cent rise in house prices from July. Prices in London - typically regarded as a precursor to nationwide trends - fell for the first time in a year.

Though some analysts note that the market always slows in the summer, the fall in London prices is leading many to declare an end to the recent property boom. The capital's annual rate of increase had stood at 23.4 per cent up until now, nearly double the national rate.

And the shift in the balance of power away from sellers "could swing even further in buyers' favour if the current credit tightening reduces lenders' ability to provide mortgages at the rates achieved in recent months," cautioned Miles Shipside, Commercial Director of Rightmove.

He added: "This may lead to slight increases in mortgage rates even without another rate rise by the Bank of England."

Another indication of the slowdown is the rise in the average amount of time properties up for sale are currently spending on the market, up five days to 85 this month.

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Author:  Joanne McCabe

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