No one has lost money in recent times betting that Britain’s house prices will confound predictions of gloom and keep motoring ahead.

The property boom has rolled on relentlessly even as the thwarted predictions of sundry commentators forecasting a crash have piled up. But with interest rates at a six-year high and growing signs that the market is losing steam, the Cassandras are emerging again to prophesy collapsing prices. The big question is, will they be proved right this time?

Indications that the market has come off the boil in the face of both rising mortgage costs and much-diminished affordability thanks to the past surge in prices are now pretty clear cut. Yet it is important to keep these trends in perspective.

Sure, the monthly gains in average UK house prices have slowed to a very modest 0.3 to 0.4 per cent, according to the key Halifax and Nationwide surveys. That is a pretty steep decline from gains of 1 per cent or more at the start of this year. Nonetheless, annual house price inflation remains in double-digit territory, at about 10 per cent.

We are, for now at least, far from this market hitting the buffers, but there are good reasons for believing that the market slowdown will persist and deepen. While interest rates are low compared with postwar history, Britons have accumulated a mountain of debt - most of it mortgages to pay for hugely more expensive houses.

As Karen Ward of HSBC notes, the result is that the proportion of disposable incomes devoted to paying home loans has reached almost 20 per cent - up from about 15 per cent a few years ago. The last time that we had to devote so much of our pay to service mortgages, interest rates stood at 12 per cent.

More pain, too, is in prospect. For one thing, base rates surely will rise again either next week or in August, to 5.75 per cent, and may well be pushed to 6 per cent before the year-end. For another, while many borrowers have been shielded from rising rates by fixed-rate mortgages, such deals are now becoming more expensive.

It is only since last month that those whose fixed rates were expiring found themselves facing a bigger bill for a new fix. Now, ever-rising numbers of people with expiring fixed-rate loans will face an unappetising choice between a more expensive variable rate, or a new, more costly fixed offer.

In addition, with first-time buyers increasingly struggling to shoulder higher mortgage costs, fewer can afford to get on to the property ladder - sapping demand.

The conclusion is that a cooling market can only cool further. In another harbinger of this, May’s survey from the Royal Institution of Chartered Surveyors, unusually showed that the number of new sellers outstripped those signing-on as would-be buyers.

A cooling market, though, is unlikely to become a crashing one. Past house price crashes have required an additional trigger in the form of rising unemployment and economic downturn. That is not on the radar screen now and short supply of homes relative to demand in the longer term is likely to sustain their value.

The most likely scenario, then, is an extended period of more muted price increases during late 2007 and 2008 that ultimately will help to restore a degree of affordability.