Fresh evidence that higher interest rates are taking their toll on the property market emerged today with figures showing slower growth in house prices.

The monthly rate of house price inflation slipped in June to 0.9% from last month's seasonally adjusted figure of 1.7%, according to the Nationwide Building Society.

Prices grew by 19.1% in the year to June, compared with 19.5% in the year to May, the data showed. The average house now costs £151,524 against £149,020 in May - more than double the price at the start of the new Millennium.

The Nationwide said its forecast for house price inflation in the 12 months to December this year remained at 15%, given higher interest rates, worsening affordability, reduced buy-to-let demand and a downgrading of buyers' expectations of future price growth.

However, the Nationwide said it believed a repeat of the late 1980s slump in prices looked unlikely.

It said recent comments by Bank of England Governor Mervyn King that house prices were likely to be above their sustainable level could knock confidence.

But the building society said it expected a slowdown in price growth, rather than widespread falls, provided that the economic fundamentals remained good.

Nationwide group economist Alex Bannister said the current economic outlook was positive.

''Although rising rates are likely to act as a brake on the market, we do not foresee economic triggers arising that might cause widespread and sustained price falls,'' Mr Bannister said.

The Nationwide said the pace of house price growth across the UK was now more even compared with recent quarters.

The areas seeing prices rise fastest were predominantly in the North and Wales, including Hartlepool, Allerdale, Barrow-in-Furness, Gateshead and Sedgefield in the North and Swansea, Powys and Gwynedd in Wales.

Price growth was slowest in some of the more expensive areas of the country including Tower Hamlets in London, Wycombe in Buckinghamshire, Winchester in Hampshire, Epsom in Surrey, and Windsor and Maidenhead in Berkshire.