Fresh evidence that higher interest rates are taking their toll on the property market emerged today with figures showing slower growth in British house prices.
The monthly rate of house price inflation slipped in June to 0.9 per cent from last month's seasonally adjusted figure of 1.7 per cent, according to the Nationwide Building Society.
Prices grew by 19.1 per cent in the year to June, compared with 19.5 per cent in the year to May, the data showed.
The average house now costs £151,524 sterling against £149,020 in May - more than double the price at the start of the new Millennium.
The Nationwide said its forecast for house price inflation in the 12 months to December this year remained at 15 per cent, given higher interest rates, worsening affordability, reduced buy-to-let demand and a downgrading of buyers' expectations of future price growth.
However, the Nationwide said it believed a repeat of the late 1980s slump in prices looked unlikely.
It said recent comments by Bank of England Governor Mr Mervyn King that house prices were likely to be above their sustainable level could knock confidence.
But the building society said it expected a slowdown in price growth, rather than widespread falls, provided that the economic fundamentals remained good.
PA