The housing market has come off the boil, although property prices in the South East have risen faster than anywhere else in the UK.

House prices in the South East rose by 2.85 per cent in the third quarter of the year compared to the UK average of 1.1 per cent, according to a new survey by the Halifax.

The cost of a home in the region is now 18.1 per cent higher than the same period last year, compared with the UK average of 8.1 per cent.

But despite the rise, the market is readjusting, with prices beginning to return to late 1999 levels, a Halifax spokesman said.

The average price of a semi-detached home in East Sussex was £124,950 and in West Sussex it stood at £135,800.

Jim McCook, regional general manager for the Halifax, said: "House prices in the South East continue to rise, albeit at a much slower rate than at the start of the year.

"The South East now has the highest rate of growth of any region in the UK.

"Having said this however, the market has been much quieter, although it is still a buyer's market.

"We are now going through a period of readjustment with prices starting to return to about the same level as at the end of 1999.

"Increased numbers of properties are coming on to the market but buyers are taking their time in making up their minds.

"Vendors are accepting offers and well-priced good properties are moving quite quickly.

"In Crawley, prices have fallen away by about one per cent. The market for flats is dead and first time buyers are leapfrogging to terraced houses.

"Agents report about 10 to 15 of these properties each week are coming on to the market - a month ago there was nothing."