LONDON (Reuters) - British house price growth eased for a second month in a row on an annual basis in October, adding to evidence that a previously rapid upturn in Britain's housing market is losing steam, a survey showed on Thursday.
Mortgage lender Nationwide said house prices rose 9.0 percent year-on-year in October, down from 9.4 percent in September but above a Reuters poll forecast for 8.5 percent.
On a month-on-month basis, house prices rose 0.5 percent in October - again slightly higher than forecast and following a slight fall of 0.1 percent in September.
"The Nationwide data for October are consistent with our view that house prices will keep on rising but at a more restrained rate," said Howard Archer, chief UK and European economist at IHS Global Insight.
"(But) there is the possibility that the markedly increased likelihood that the Bank of England will not lift interest rates before mid-2015 will provide a near-term lift to housing market activity and, possibly, prices as well."
A Reuters poll of economists on Wednesday showed they still expect British interest rates to rise in the first quarter of this year, although the consensus has become much more uncertain recently.
Earlier this year BoE Governor Mark Carney said a potential build-up in household debt due to rising house prices posed the biggest domestic threat to Britain's economic recovery.
Since April, lenders have been required to make more detailed checks on borrowers' ability to pay back loans, and later the BoE limited how many mortgages banks can issue at high multiples of a borrower's income.
Data from the BoE on Wednesday showed British lenders approved the fewest mortgages in more than a year last month.
Nationwide said some forward-looking indicators like new buyer enquiries suggest that housing market activity may soften further in the near term, especially in London.
"(However), if the economy and the labour market remain in good shape, activity is likely to pick up in the quarters ahead providing mortgage rates do not rise sharply," he added.
Other housing surveys have also suggested that the housing market will continue cooling, at least in the next few months.
The Royal Institution of Chartered Surveyors' monthly house prices balance fell to a 15-month low in September, while Halifax's gauge of house prices fell more than expected last month.
(Reporting by Andy Bruce; Editing by Toby Chopra)