House prices start to slow

House prices across the UK are starting to level out, the latest figures released by the government have shown, with rising interest rates a major factor for the cooling of the market.

Average house prices rose by 10.9 per cent on an annual basis in May, a decrease from April’s annual rate of growth of 11.3 per cent, according to the report from the Communities and Local Government Department (DCLG).

While the average cost of a UK home reached £211,056 in May and though Northern Ireland has experienced inflation of 52 per cent over the past year, the five recent increases in the rate of interest is widely seen to have slowed the market down, with prices in most regions now reaching a plateau.

Only London is experiencing continued growth, the figures also showed, with prices now 14.5 per cent higher than a year ago.

Commenting on the market prospects, Michael Coogan, director general of the Council of Mortgage Lenders, said: "I don’t believe there will be a crash.

"But clearly a slowdown is more likely in an environment of higher interest rates," he added, predicting that prices will grow by only two to three per cent next year.