UK house prices rose 1.2 percent in June, the lowest increase since November, according to today’s Halifax house price index, providing more signs that higher borrowing costs are taking their toll on the property market.

This is the smallest gain since last November and well below the average monthly rise of 2.1percent in the preceding six months.

The figures come hot on the heels of similar data from the Nationwide Building Society, Hometrack and others suggesting a real cooling of the housing market is becoming established.

Halifax also reported that house prices were 21.5% higher in the past three months than in the same period in 2003.

The seasonally-adjusted standardised average house price was now £159,735, the survey found.

The string of interest rate rises is beginning to affect the housing market, suggested the survey. Martin Ellis, Chief Economist at Halifax said this month's gain was the smallest since November. "This suggests that the recent increases in the cost of borrowing are beginning to curb housing demand," he said.

The cooling in the market was partly because an increasing number of first-time buyers are finding themselves priced out of the market, the survey said and pointed out that this, and the higher cost of borrowing, would put more downward pressure on housing inflation in the coming months.

But, it added, house prices would still continue to rise, just at a slower pace.