House prices rose 0.7% last month with the average cost of a home reaching £198,915, according to data from the Halifax.

The rise was less than 1% for the fourth month in a row, indicating that the market was slowing down. The figures were released as the Bank of England announced it would hold interest rates at 5.75% this month, although many analysts predict a further rise next month.

A report by the National Housing Federation (NHF) this week predicted that UK house prices will average £300,000 by 2012.

The NHF said a housing crash was unlikely, in spite of a reported slowdown in the market. Its report suggested that house prices will rise 40% across England by 2012. It calculated the average house price will hit £302,400, and the London average will reach £478,300.

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