British house prices barely rose during August, according to Britain's biggest mortgage lender Halifax, adding to other signs of moderation in the housing market.

The average house price rose 0.1pc in August to £186,270, slowing sharply from an increase of 1.2pc in July, the Halifax House Price Index showed.

Between June and August prices rose 3pc when compared to the previous three months, however this quarterly growth was down from 3.5pc last month.

On an annual basis prices rose 9.7pc in the three months to August, but this was down from 10.2pc in July.

Halifax said there are tentative signs that a better balance between demand and supply may be emerging which, if sustained, would help to dampen the pace of house price growth.

Martin Ellis, a housing economist at Halifax, said: "Housing demand is supported by continuing economic recovery, growth in employment, improving consumer confidence and low mortgage rates. Nonetheless, earnings growth that remains below consumer price inflation, and the prospect of an interest rate rise at some point over the coming months, are likely to curb demand.

“There are some signs of an improvement in housing supply, both in terms of more second-hand properties coming onto the market and increased numbers of new homes. These trends, if sustained, should help to improve the balance between supply and demand, contributing to an easing in the pace of house price growth."