New research carried out by property website has shown that house price inflation is beginning to ease.

The research by the website puts the easing of inflation down to the effect of tighter bank lending rules.

Asking prices annually rose by just over 7% in the second quarter of this year, compared to 9.5% in the year to the end of the first quarter. said this was the slowest pace in inflation in two years.

The report, which was published in association with Davy, found that asking price inflation in Dublin had slowed to 6.8%, down from 11% at the turn of the year.

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Author of the report Conall MacCoille, chief economist at Davy, said: "The Celtic Tiger years demonstrated the folly of allowing rising leverage in the mortgage market to drive double-digit house price inflation indefinitely.

"This time round, the Central Bank's three and a half times loan-to-income (LTI) threshold is preventing households from chasing prices higher by taking on excessive mortgage debts.

"Of course, Ireland still faces an acute housing shortage but unlike the past there is a more sensible debate on how to solve the problem," he added.