UK house price growth decelerated in July, pointing to further evidence of a market slowdown, figures from mortgage bank the Halifax show.
Average house prices rose slightly in July, the Halifax said
Prices rose 0.2% last month, up from 0.1% in June, the Halifax said.
But during the three months to July, annual price inflation slowed to 2.3% - its worst performance since April 1996, the UK's largest mortgage lender said.
July's slight increase left average house prices at a seasonally adjusted £162,994, from £162,605 in June.
Halifax said the Bank of England's decision on Thursday to cut interest rates to 4.5% would reduce mortgage payments.
"Yesterday's 25 basis points cut in interest rates will reduce mortgage payments as a proportion of gross income for the average new borrower from 20% to 19%, the average for the past 20 years and well below the 34% peak in 1990," the Halifax said.
It also said that the UK economy remained in "sound shape" despite the slowdown and that average earnings were expected to rise by 4.5% in 2005, contributing to an increase in households' disposable incomes of 2.5%.
Analysts said the cool nature of the report was in line with the observed slowing of the UK housing market.
Experts say the stabilisation of prices should continue, with this week's interest rate cut insufficient to spark off any new housing boom.
"The slide in the annual rate fits with the drop in mortgage approvals up until the end of last year," said Alan Clarke of BNP Paribas.
"The latter has since reversed, suggesting the trough in house price inflation is not far off."