The booming housing market is beginning to show signs of slowing down as the impact of four interest rate rises begins to bite, especially in the South.

Property web site Rightmove said prices in England and Wales rose by just 1.2 per cent during the four weeks to July 10 to an average of £196,198.

The number of homes sold also fell to its lowest level for more than a year, with the exception of the traditionally quiet Christmas period.

At the same time the number of properties on estate agents' books increased by four per cent to an average 56 per branch, leading to supply outstripping demand for the first time in more than 12 months.

The group said the back-to-back rate rises by the Bank of England's Monetary Policy Committee in May and June were starting to have an impact on the housing market, with sellers being more realistic about asking prices.

So far the slowdown was only apparent in the South, with prices continuing to boom in the North.

Wednesday July 21, 2004