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UK property growth 'slowing down'

British house price growth slowed for a third consecutive month in May, according to the Halifax house price index.The bank saw monthly growth of just 0.3 per cent in May, down from 0.9 per cent in April, 1.2 per cent in March and 1.9 per cent in February. The standardised average house price in the UK now stands at £196,893.Strengthening evidence of moderation in housing market activity combined with dampening effects on homebuyers' spending power are believed to be behind the recent fall-off, which follows a strong start to the residential market in 2007."Higher interest rates, the negative trend in real earnings growth and rising food prices are likely to bite increasingly on householders' finances over the coming months, curbing housing demand," Halifax chief economist Martin Ellis said."House price inflation is expected to moderate as a result. The market, however, remains supported by solid economic foundations which, together with supply shortages, will continue to support prices."The Bank of England is expected to hold interest rates later today but has indicated at least one more rate rise will be needed to curb upward inflationary pressures before the year is out.The Royal Institution of Chartered Surveyors has predicted that the four hikes from August last year are yet to have their full impact on the residential housing market and the indications are that last year's fast-paced growth will not be matched in 2007.

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