The Nationwide building society reported slowing house price growth in August in an environment that was consistent with signs of cooling in the housing market and the wider economy.
While low wage growth continued to exert pressure on household finances, Nationwide said robust employment growth and the constrained supply of new homes coming onto the market would provide support for house prices.
Average price growth slows
Nationwide's calculation of the average house price fell to £210,495 in August, from £211,671 in July, a monthly fall of 0.1% and brought down the annual rate of house price growth to 2.1% from 2.9%.
Robert Gardner, chief economist at Nationwide, said there were several explanations to the fall, including tighter household budgets.
"While measures of housing affordability are not particularly stretched at a UK level, pressures are evident in some regions – especially London and the south of England," he said.
Levels of stamp duty might also be putting off buyers, particularly in the areas where affordability was looking stretched, Gardner added.
Total revenues from stamp duty in the 12 months to the end of the second quarter this year reached £12.8bn. By comparison, in late 2007 when house buying activity reached its peak – at levels 30% above today – annual stamp duty revenues were £10.6bn.
Meanwhile, the 3% stamp duty imposed on second home purchases at last year's April budget accounted for 22% of total residential stamp duty revenues in the last 12 months, according to Nationwide.
"This is important because [London and the south of England] contribute significantly more than their par share of stamp duty revenues as house prices are well above the UK average," said Gardner.
Consumer confidence lower
Market research group GfK reported recently that consumer confidence in July fell to its lowest since Britain voted to leave the European Union as higher prices and sluggish wage growth squeeze household finances.
YouGov followed with a report linking low consumer confidence with a weakening of the housing market.
"The moderation in price growth primarily reflects the squeeze on real wages and the slowdown in the pace that mortgage rates are falling," said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
He added: "Prices likely will continue to struggle to rise much, given that inflation still has further to rise, consumer confidence has deteriorated sharply since June and lenders intend to reduce the supply of unsecured credit."
Evidence of slowdown mounts
The Nationwide survey echoed that of rival mortgage lender Halifax, which reported earlier in August that annual house price growth had fallen to 2.1% in July.
Halifax also cited the squeeze on spending power and the impact of the 2016 stamp duty changes as the major factors behind the slowdown in house price growth.
Rightmove, the online estate agent, bucked the trend by reporting price growth of 3.1% in July, up from 2.8% in the previous month.