THE red-hot housing market that has enjoyed spiralling price inflation in the past 12 months appears to be cooling.

Figures released by the National Association of Estate Agents (NAEA) show the market is stabilising, with an average 26 per cent fall in the number of new applicant enquiries in October, compared with September.

The number of new sales agreed in October was also down, by almost 19 per cent, according to the NAEA's October Housing Market Survey.

The national figures are reflected in Worcestershire, where both buyers and sellers seem to be dropping off.

Peter Child, chairman of the Hereford and Worcester NAEA, said activity in the area was slowing.

"New instructions are more difficult to obtain," said Mr Child, who runs Peter Child Estate Agents, in St Andrew's Street, Droitwich.

"And prospective purchasers are no longer in abundance."

The survey found that house prices were running at 18 per cent higher than in October 2001.

The NAEA believes that the house price inflation may be the cause of the slowing market, as sellers are now asking too much for their homes, which in turn deters buyers from coming into the market.

"It appears that national headlines may be encouraging some unrealistic expectations, with more home owners overriding their agent's advice on asking price," said Julie Westby, NAEA president.

"Professional estate agents base their market appraisal on a whole host of factors, including location, the desirability of the property and local economic conditions."

She urged sellers to consult an experienced local agent to minimise the risk of slowing down their sale.

The survey also found housing stock levels had fallen by five per cent in October, compared with September.

The NAEA represents the interests of 9,500 members in all areas of the property industry, including residential and commercial sales, lettings, property management and auctions.