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UK property 'cooling in May'

Britain's housing market began to show signs of slowing down in May, the latest Nationwide house price index shows.Monthly growth totalled 0.5 per cent in May, falling from the 0.9 per cent seen in April, the building society said. Annual growth fell from 10.3 per cent to 10.2 per cent thanks to strong activity 12 months ago.The May fall has been partly caused by recent interest rate hikes by the Bank of England, Nationwide said, saying that the likelihood of a further raise meant a "measured cooling" can be expected in the coming months.Fionnuala Earley, Nationwide's chief economist, said the monetary policy committee's "hawkish" attitude had implications for budding property owners."Higher interest rates, with the threat of more on the horizon, should signal caution to those thinking about stretching themselves to get a foot on the ladder," she said."This is not only because of the level of debt in the short term, but also because, in a low inflation world, the real value of the debt is not eroded as quickly. As a result the burden of servicing that debt remains heavier for much longer."Today's figures for May strengthen the assumption that the market is showing signs of slowing. Yesterday's Land Registry figures for April revealed monthly growth of 0.6 per cent, down from the one per cent seen in March.

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