THERE was further evidence of a slowdown in the housing market last night as Halifax reported an easing in price growth for the second consecutive month.

Britain's biggest mortgage lender said UK property prices rose by only 1.3 per cent last month, following a gain of 1.2 per cent in June, both of which were well below the average monthly rise of more than two per cent seen during the previous six months.

At the same time, property website Rightmove said house prices in England and Wales fell by 0.5 per cent, or nearly £900, during the last three weeks of July as higher borrowing costs took their toll on the market.

The figures come as the Bank of England's monetary policy committee begins a two-day meeting to decide if interest rates should rise again.

The committee, which has raised rates by one per cent since November, is widely expected to increase them by a further 0.25 per cent to 4.75 per cent, despite evidence that the housing market could be cooling.

The latest data contrasts with figures from Nationwide Building Society, which last week said prices soared ahead by 2.1 per cent last month, although surveys from the Royal Institution of Chartered Surveyors and the National Association of Estate Agents also reported the market was slowing.

Philip Shaw, an economist at Investec, said: "Taken on their own, the observations from Halifax would suggest that house price inflation is beginning to cool down.

"However, the Halifax figures conflict with the Nationwide numbers, and overall, the evidence on the housing market remains conflicting, although there are flickers of hope that we are seeing an orderly slowdown.

"The committee will need much more convincing evidence of a slowdown in housing activity before it puts rate increases on ice."