The rising interest rate is finally putting the brakes on the UK housing market after mortgage lending fell by 9 per cent in April and the average house price showed its smallest gain since the beginning of 2007.

In April, gross mortgage lending reached £28.8 billion - an 18 per cent increase on the same month last year but a 9 per cent fall compared with March.

The Council of Mortgage Lenders said that buyers would borrow 4 to 5 per cent more this year than in 2006 but the market was now beginning to stabilise.

In May the average price of a house increased by 0.4 per cent from £236,490 to £237,361, the smallest gain since the beginning of the year. Annual house price inflation is slowing from 15 per cent in April to 13.1 per cent in May, according to rightmove.co.uk, the UK property website.

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No one is suffering as much as first-time buyers

Lenders are getting more picky, yet property prices are refusing to fall far enough, fast enough

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• First proof of decline in housing market

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BACKGROUND

• Mortgage slowdown triggers house price fears

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• Housing comment: Down to a simmer

This month the Bank of England's Monetary Policy Committee (MPC) increased the interest rate by a quarter point to 5.5 per cent, the fourth rise in ten months.

The MPC will publish the minutes of this month's rate meeting on Wednesday. They are forecast to show that eight out of nine committee members voted in favour of a rate rise, with only David Blanchflower expected to have voted against an increase.

Rightmove also revealed today that the looming Home Information Pack deadline of June 1 had resulted in an increase of people advertising their homes for sale. The company said 200,000 more homes were listed on its site in May, beating the previous record in June last year, when advertisements rose by 178,158.

Homeowners must pay £500 to put together the Home Information Packs, which contain all the paperwork needed to sell a house. Sellers face being fined up to £200 a day if they do not provide a pack to prospective buyers.

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