House prices are set to dip across the UK next year as the market pauses for breath following the sharp growth in values seen in 2014, according to new predictions by analysts.
The Centre for Economics and Business Research (Cebr) said the UK property market has reached a turning point after its strong recent recovery.
This will be compounded by some prospective buyers being "startled" by the rise in interest rates which is widely expected by forecasters in 2015 as the Bank of England base rate moves off its historic 0.5% low, it predicts.
Cebr forecasts that prices will grow by around 7.8% across the whole of 2014, which is just over double the rate of the 3.5% increase seen across 2013 and would be the strongest annual growth seen since 2007.
But next year, prices are likely to see a 0.8% year-on-year fall as the market adjusts itself, it predicts.
Growth is likely to pick up once more in 2016, with prices increasing by around 2.6% year-on-year, according to Cebr's forecasts. Values are then predicted to take upward steps of around 3% each year,
with a 3.4% annual increase forecast for 2020.
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Estate agents are reporting receiving fewer new enquiries from potential buyers, which is leading the upward pressure on house prices to ease and means some properties are taking slightly longer to sell than they might have done earlier this year.
The London market, which has been the driver of house price growth, is now seeing a rapid cool down, according to some recent studies.
The Cebr report, which used Office for National Statistics (ONS) data as a base for some of its findings, said: "Affordability has become such an issue in the more expensive regions of the UK that buyers are starting to baulk at high prices."
It said that although any rise in the base rate, which will lead to mortgage holders' costs becoming more expensive, is likely to be very gradual, "prospective buyers are likely to be startled by the first such increase - leading many to hold off from making purchases. This too will lead to lower prices."
Scott Corfe, head of macroeconomics at Cebr, said: "Tougher mortgage eligibility criteria, high deposit requirements and concerns about future rate rises are starting to take the steam out of the UK housing market."
He also moved to offer some reassurance, saying: "Price falls next year will be modest and we shouldn't be too worried about this - we are not anticipating a crash.
"The market is adjusting after getting ahead of itself at the start of 2014."
Last week, the Bank of England said that it plans to leave the Government's flagship Help to Buy mortgage support scheme untouched for now, after finding that the scheme does not pose material risks to financial stability under current market conditions.
The Bank said that in general, housing market activity appears to have eased slightly and projections point to the rate of increase in property values moderating.
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In June, the Bank announced stronger curbs on mortgage lending, including saying that no more than 15% of lenders' new mortgages should amount to more than 4.5 times the income of borrowers.
Toughened industry-wide mortgage lending rules also came into force in April, which force lenders to ask mortgage applicants for more details about their spending habits, in order to make sure that they can truly afford their repayments.
Lenders have issued several warnings recently to borrowers to start planning now for the prospect of interest rates rising.