(afx)
Signs of a cooling down in the UK housing market emerged this morning as government figures showed house price inflation in the year to March slowing down to 7.8 pct from 9.8 pct in February.

The Office of the Deputy Prime Minister found that the average house in the UK cost 161,306 stg in March, compared with 160,937 in February.

In London, the monthly survey found house price inflation slipping to 4.9 pct from 5.7 pct in February.

Apart from Northern Ireland, the home countries saw a fall in annual

inflation, with the largest fall experienced in Scotland.

These figures may encourage the Bank of England that its gradualist approach to raising interest rates is finally having an impact on the housing market.

The MPC has raised interest rates on three occasions in the last six months as it seeks to rein in soaring consumer debt and the housing market, which, despite today's data, appears to have been going from strength to strength despite the higher cost of borrowing.