UK house prices are set to reach a "turning point" according Nationwide.

The building society warns that the market confidence created by last summers interest rate cut, is starting to run out of steam, following five consecutive months of average property price rises.

"Were at a turning point," said Fionnula Earley, Nationwides chief economist. "I think we are at the stage where affordability constraints are biting - and there are other things on the horizon that will stop people splashing out: higher utility bills, rising unemployment."

Nationwide forecasts that average property prices will rise by up to 3% in 2006. If accurate, then property prices are likely to slow during the latter half of the year, because the annual rate, according to nationwide, last month stood at 3.7%.