Rising anxiety is holding down house prices as buyers brace themselves for another rise in base rates, possibly this week.

The latest figures from the property data company Hometrack, released today, show that prices are now rising in only 28 per cent of the country.

London prices — up 0.7 per cent in June, the highest rate of growth — are tipped to falter as profit-takers flood the market.

The annual rate of growth nationally is 6.4 per cent after the monthly rate dropped to 0.3 per cent. The average property price is £176,100. However, there is little hope among homeowners that the price-rise slowdown will be enough to convince the Bank of England’s Monetary Policy Committee to hold interest rates at 5.5 per cent on Thursday.

BACKGROUND

• Fears of retail bloodbath as interest rates hit home

• Fall in mortgage applications as interest rate rises bite

• Inter-bank rates climb to nine-year high

• Emergency injection

• The 3Rs: reading, writing and interest rates

Fight back against rising interest rates

Mark Bridge suggests some easy ways to boost income and offset climbing mortgage repayments

• How landlords can boost their profit

• Make £1m tax-free in just 10 years

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• The Times Shadow MPC

• The Bank of England MPC

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Richard Donnell, the director of research at Hometrack, predicts that annual growth in house prices will slow to 4 per cent in the coming months. The slowdown is most extreme in the North, North West, Wales (where prices were up just 0.1 per cent in June) and in the East Midlands, where property prices failed to increase.

A flood of properties on to the market in London, which began in the lead-up to the proposed introduction of home information packs on June 1, has continued: supply was 10.9 per cent higher in a month. Yet demand is falling — up an average 5 per cent across the country, it fell 3.5 per cent in the capital.

Mr Donnell said: “The ratcheting up of interest rates since summer last year has finally caught up with the London market, which has been the engine for house-price growth over the past 12 months.”

He said that owners increasingly were cashing in on prices that appeared to be at a peak. “It seems likely that the average time to sell will increase in the months ahead, with a slowdown in sales volumes and a switch to a buyers’ market.”

Hometrack polls agents across the country and includes remortgages in its data, often identifying trends months before such changes are reflected in Land Registry figures.

The latest Land Registry data, released last week, show that prices rose 0.7 per cent in May to an average £180,594, an annual increase of 8.9 per cent. London prices rose 1 per cent in a month, to 15.3 per cent.

The continued outperformance of prime property in London is masking softer performance in the south-eastern suburbs. Lettings data from the agent Knight Frank, also released today, shows that rents have increased 12.2 per cent in a year in London, boosted by higher prices in Canary Wharf and Wapping.

Notting Hill and Kensington, in Central London, were among other locations where landlords were achieving higher rents.

Liam Bailey, head of research for Knight Frank, said that the increase was the highest since 1995, yet yields in Central London are at an all-time low of 4 per cent. “Capital value growth has overshadowed the performance of the rental market.

“We anticipate that over the coming months rental growth will catch capital value growth as the sales market slows over summer,” he said.

But there are signs that investors are among those tempted to take profit. Mr Bailey said: “Some londlords are continuing to sell properties to take advantage of high capital price growth, and also to reduce their exposure to higher interest rates.”