By Matt Falloon

LONDON (Reuters) - House prices unexpectedly fell for the first time since December last month, according to HBOS's Halifax house price survey, in a firm sign that the property market is coming off the boil.

Rising interest rates and a global lending squeeze have been expected to weigh on house market sentiment in Britain and the latest decline in prices will encourage the view that interest rates could fall in the coming months.

The Bank of England is widely expected to keep rates at 5.75 percent later on Thursday, but a 50 basis point cut from the U.S. Federal Reserve last month has piled the pressure on other central banks to ease monetary conditions.

Halifax said house prices fell 0.6 percent, down from a downwardly revised 0.3 percent gain in August and well below forecasts for a 0.4 percent increase.

"This could well prove to be the beginning of the end for the boom in the UK housing market," said George Buckley, chief UK economist at Deutsche Bank.

Nonetheless, the annual three-month rate of house price inflation remains in double digits at 10.7 percent, although that was below expectations for a 11.1 percent rise and down from 11.4 percent last month.

The average house price fell to 198,500 pounds.

"September's price fall is consistent with the normal behaviour of the market during a slowdown. A mixed pattern of monthly price rises and falls is a typical feature of a more subdued housing market," said Martin Ellis, Halifax chief economist.