A measured slowdown in the property market may be underway, the Halifax has reported, as house prices fell at a reduced rate last month.

According to the building society?s latest figures, prices fell during November by 0.4%, compared with a 1.2% fall during October and a 0.5% fall in August.

The Halifax said that although activity in the property market has fallen from recent highs to levels similar to the late 1990s, the economic indicators underpinning the property market remain strong.

Past major housing market downturns have all been caused by a combination of economic recession, rising unemployment and significant interest rate hikes, the Halifax said. However, they noted that currently employment is rising and interest rates are expected to peak at the current rate.

?The fundamentals underpinning the housing market remain sound. In particular, the ongoing strength of the labour market, reflected in rising employment levels, will continue to support housing demand,? said Halifax?s Chief Economist, Martin Ellis.

The Halifax has forecasted further falls next year, with prices expected to dip a further 2% during 2005. But the lender expects the market will soon pick up again.

?Sound economic fundamentals mean that the market will remain in good health; UK plc is in good shape. Over the medium term, we expect the housing market to enjoy a period of stability. House prices are forecast to rise at a modest rate following next year?s slight decline,? said Mr Ellis.