The pace of house price rises will start to slow over the next few weeks as an increase in housing supply and a looming interest rate rise takes the heat out of the housing market, according to Knight Frank.

UK house price growth is holding up surprisingly well given the stamp duty holiday ended just as inflationary pressures began to multiply and the furlough scheme finished. Last week, the Nationwide reported that UK prices rose 9.9% in the year to October, a figure that was effectively unchanged from September, the final month of the stamp duty holiday.

Demand is stronger than normal, bolstered by frustrated buyers who were unable to move during the stamp duty holiday and those who waited for calmer conditions after its conclusion. But the increase in supply and interest rates will tame UK house price growth, at least in the short-term.

Knight Frank points out that interest rates were 0.75% before Covid struck and any effect is likely to be limited while rates remain below this level. But the presence of inflationary pressures could potentially cause demand to start fraying around the edges.

The agency highlights the fact that over 3.5 million first-time buyer mortgages have been issued since the base rate dropped to 0.5% in March 2009. That is a large group of homeowners who do not know what it is like when interest payments rise meaningfully.

The other thing to watch closely, according to Knight Frank, is supply, which will put downwards pressure on prices as it increases.

James Cleland, head of Knight Frank’s Country business, says owners are already positioning themselves for 2022.

He commented: “We are starting to see a notable increase in the number of owners contacting us with a view to listing their property next spring.

“For shrewd sellers, the best time to put their property on the market is likely to actually be January when there are a large number of buyers around.”