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UK house prices show further signs of cooling

Johnnie Pakington | Digital Vision | Getty Images

The perceived value of homes in the U.K. rose at the slowest rate in five months in August, in what may be the latest sign house price growth in the country is finally starting to subside.

This was the third month in a row where households' expectations of house price rises fell, according to estate agent Knight Frank and data company Markit.

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These figures "suggest that the price exuberance seen in some corners of the market is easing," Gráinne Gilmore, head of U.K. residential research at Knight Frank, said in a statement.

They also point to increasing nervousness about possible interest rate rises by the Bank of England amongst U.K. households.

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London house prices have risen particularly sharply this year, with a 20 percent rise in the year to June, according to official figures.

The volume of house sales is also likely to continue its decline, with 5.9 percent of UK households planning to buy a property in the next year, down from 6.7 percent in July. This may partly be due to tighter new rules on mortgage lending, as well as perceived inflation in house prices.

House moves can have a big effect on the broader economy beyond house prices, as they lead to new big-ticket purchases like furniture and televisions.

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  • Diana Olick serves as CNBC's real estate correspondent as well as the editor of the Realty Check section on CNBC.com.

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