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Lowest house price growth in over a year

House prices grew by just 0.1 per cent in July, according to the latest Nationwide survey.This is the lowest monthly increase in house prices since April 2006, although the average UK property costs £184,270, still up £16,537 on last year.High interest rates are thought to be reducing demand for mortgages and also bringing down the rate of property inflation.Fionnuala Earley, Nationwide's chief economist, said: "The sharp slowdown in July's house price numbers could show that potential homebuyers are thinking twice about overstretching themselves in a higher interest rate environment."Nationwide urged the Bank of England to proceed cautiously in terms of the possibility of a further interest rates rise."The Bank of England now faces a tough balancing act in the months ahead, with tightening consumer finances on the one hand and resilient economic growth on the other," said Ms. Earley. Meanwhile, the British Bankers Association (BBA) reported an 11 per cent decrease in the number of home loan approvals last month.The BBA said mortgage approvals had fallen to 75,318 last month, compared with 86,006 in the same month last year.Approvals are regarded as providing a more up-to-date snapshot of the market, and the figures from the BBA might therefore reflect a slowing in the market as a result of high mortgage costs.

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