Figures from mortgage lender Halifax shows that house prices have grown marginally by 0.1per cent in May. The mini-revival in the housing market showed further signs of slowing down. The rise was the smallest increase in the cost of property since prices fell by 0.2pc in January this year.

Halifax chief economist Martin Ellis said: "There are signs that housing market activity may be beginning to level out. The pressures on the household sector resulting from higher unemployment and significantly higher household bills, together with the current high level of house prices in relation to earnings, are likely to constrain housing demand and curb house price growth and activity over the remainder of 2006."

Howard Archer, chief UK and European economist at economics group Global Insight, said: "The marginal 0.1pc rise in house prices in May reported by the Halifax adds to the recent mounting evidence that house prices may be starting to lose momentum.

Further signs that the housing sector is slowing down was evident by the fact that Bank of England's Monetary Policy Committee kept interest rates on hold when it announced the results of its two-day meeting.

But the next movement in the cost of loans like mortgages, homeowner loansetc. is expected to be up soon and this will further slow down the housing market.