AFTER an extended period of frenetic activity in the housing market, the latest monthly survey by the National Association of Estate Agents shows the first signs of a calmer picture emerging.

The NAEA's housing market survey for June shows that prices were continuing to rise, at 17.5 per cent higher than in the same month in 2001, though at a slower rate of increase than was recorded in May.

However, a number of key indicators of future activity levels, including the number of new applicant enquiries and the number of viewings, were reported as down on the previous month.

A further finding is the fact that the proportion of sales to first-time buyers is down to under 20 per cent, from an average of around 30 per cent between October 2001 and February this year.

According to the NAEA, this suggests that, as house price inflation has raised the cost of entry onto the property ladder, affordability issues have been created.

Hugh Dunsmore-Hardy, NAEA chief executive, said: "Our findings show early signs that market conditions are starting to stabilise of their own accord and without the need for government or Bank of England intervention.

"The NAEA is not the only organisation to have identified this trend - recent figures released by lenders reveal a drop in lending in June, following three months of record increases.”

Mr Dunsmore-Hardy continued: "We continue to hold the view that the market will see a gradual slowdown, although some predictions have painted a far more pessimistic picture. While some figures are down, other key indicators are up, although by smaller increments than in previous months, all of which suggests a market that is steadying after an unsustainably hectic period."

Among the figures that have increased are those for new sales agreed, which have grown by 10 per cent after a dip in May and the number of purchasers who did not require a mortgage, which is up by 12.5 per cent on the previous month. Both indicate that there are still plenty of buyers able to proceed in the market.