Lenders say there is a huge amount of caution in the market now and not just emanating from themselves. They point to the contradictory signals from the US where it is unclear from one week to the next whether or not it is entering recession. Even the situation in Europe where many fear their economies are already slowing down again is affecting the market. Add the impact from foot and mouth and the downturn in the tech sector and you have a recipe for caution, one lender noted.

He added that e-commerce people have now left the market and there are far fewer young couples with substantial amounts of money. The one thing propping up the market indeed appears to be the first-time buyer. This is not necessarily sustainable. If there is a sign that prices of starter homes are dropping, many could put back their plans to purchase for quite a time. All in all it is a risky time for the market. If all goes well, this will be a slowdown to more sustainable rates of house price growth. But a real tightening of lending policies or indeed a shock to the economy could make the pace of decline more uncomfortable.