THE World Cup and possible interest rate rises will slow house price growth in the second half of the year, according to housing information service Hometrack.

Average house prices are likely to rise just 3% this year, despite a 0.6% overall increase during the month of May, according to new figures. The average house price for the UK is now £164,500.

Richard Donnell, Hometrack's research director, said prospects for house price growth in the second half of the year were poor.

He said: "Turmoil in the equity markets and talk of possible interest rate rises are likely to impact on buyer confidence, while the World Cup will impact on activity levels over the summer."

The slow outlook comes despite a 1.2% increase in London house prices during May alone, with the South-east (0.6%) and East Anglia (0.5%) also leading the increase.

Prices were stagnant in the rest of the country.