Interest rate rises start to bite as house prices in London rise only 0/.7% in June

London house prices remained muted in June due to the rise in interest rates, with average house prices increasing by only 0.7% from £264,801 to £266,710.

The latest data from Haart estate agents revealed that buyers have become increasingly price sensitive in anticipation of further interest rise.

Year on year growth is, however, still relatively strong at 8%.

Paul Smith, Haart chief executive, said: “With the recent succession of interest rate rises, it is no wonder that buyers are becoming increasingly price sensitive and growth in the capital has been more subdued than expected in the first half of 2007. Another interest rate rise is not necessary.