The buoyancy of both the housing and mortgage markets indicates that the marked slowdown in the world economy and the recession in the UK manufacturing sector have so far had little adverse impact on consumer sentiment.
Despite this fall, the housing market remains underpinned by a combination of economic expansion, historically low interest rates and high employment.
The UK housing market is set for a period of broad stability, with house prices forecast to rise by 3%, broadly in line with the predicted rise in retail price inflation.
The UK housing market is set for a period of broad stability... low single digit growth is expected to be the norm across most of the country.
There were also signs that housing market activity may be beginning to level off.
The easing in economic growth over the past year, together with a ratio of house price to average earnings that remains historically high, is expected to curb housing demand, and therefore prevent a renewed surge in house prices.
The combination of improving economic growth, low interest rates and high employment will continue to underpin a healthy level of housing demand over the next few months.