Additionally, annual house price growth has fallen from a peak of 10.2% in July and is now at its lowest rate since January 2014 (7.3%), with Q4 prices 7.8% higher than Q4 2013.
Home sales also dropped to under 100,000 for the first time since November 2013 (98,490), with sales in the three months to November 1% lower than in the previous three months (June-August). Despite this recent modest decline, sales during September to November were 5% higher than in the same period last year.
Mortgage approvals also fell in November, to 59,029. Approvals have now fallen by 23% from 76,611 in January 2014.
However, there has been a better balance between supply and demand. Market conditions - as measured by the ratio of house sales to the stock of unsold properties - eased for the fourth consecutive month in November, according to the latest data from the Royal Institution of Chartered Surveyors’ (RICS).
Halfiax stated that they expect a further moderation in house price growth over the coming year. House prices nationally are predicted to increase in a range of 3-5% in 2015.
Commenting, Martin Ellis, housing economist, said:
"House prices in the final three months of 2014 were 0.3% higher than in the preceding three months. The quarterly rate of increase has now fallen for five successive months. Annual price growth also eased further, to 7.8% in December. This compares with a peak of 10.2% in July.
“The deterioration in housing affordability as a result of rising house prices, earnings growth that has been consistently below consumer price inflation until very recently and speculation of an interest rate rise, have combined to temper housing demand since the summer. The weakening in housing demand has led to a reduction in both price growth and sales in recent months.
"We expect a further moderation in house price growth over the coming year with prices nationally predicted to increase in a range of 3 to 5% in 2015. Housing demand, however, should continue to be supported by a growing economy, rising employment levels, still low mortgage rates and the first gain in ‘real’ earnings for several years."
Alex Gosling, managing director, online estate agents Housesimple.co.uk, comments:
"Although house price growth in December was almost 1%, quarterly and annual figures give a more accurate indicator of
the market, which is a market that has slowed appreciably since the summer.
"Buyer numbers dropped off noticeably in December, although there was a flurry of activity when the stamp duty changes were announced.
"However, after a slow December, the New Year has kicked off with gusto.
"Buyer activity is strong, and the next few months could be the busiest we've seen for a while, as purchasers look to take advantage of the new stamp duty rates and buy before the General Election.
"And with interest rates expected to stay at their current rate for the rest of this year, and lenders still offering some very attractive mortgage deals, there are a lot of reasons for buyers to feel optimistic in 2015."
Jonathan Samuels, chief executive of Dragonfly Property Finance, said:
"There's little doubt that the UK property market has come off the boil. The change of speed in the capital is especially pronounced.
"For a number of months, the speed of price rises in London verged on the supersonic.
"High house prices, low wage growth and interest rate nerves have all played a part in slowing the market down, but so has common sense.
"A lot of today's homeowners have been caught out by the market in dramatic fashion before, and they'd rather it didn't happen again.
"The property market is taking a much needed breather and it's a breather that could last most of 2015.
"The run-up to the General Election could again dampen demand and activity, especially as housing policy looks set to be a major election issue.
"Overall, I'd expect a much calmer year for the UK market. If we want a sustainable property market, this is no bad thing."
