House prices have peaked and a slowdown in the market has begun, according one of the country's biggest mortgage lenders.

Figures released by the Halifax building society on Wednesday show the average house price last month remained unchanged at about £94,000.

Analysts say the figures confirm predictions that the slowdown in the UK economy, largely affected by the pre-terror attack situation in the US, would reach the housing market.

"We have been expecting the general slowdown in the UK economy to curb housing demand and result in an easing in house price inflation during the latter part of this year and into 2002. September's figures give further support to this view," Halifax concluded.The building society now forecasts house prices to rise by nine per cent for this year but events in the US have made predictions less certain.The Halifax figures conflict with the Nationwide building society, which reported a 2.8 per cent rise last month, and a 15 per cent rise since September 2000. This is mainly due to the fact that the Halifax is a national lender and most of Nationwide's business is in the South East which has seen the strongest activity.

"Normally they track each other over time, over a period of two or three months they usually have the same trends and the analysis is often very similar," a Nationwide spokesman said.