British house prices fell for the second month in a row in May in the latest sign the country's property boom has fizzled out, property website Hometrack.co.uk said this morning.
It said prices fell 0.1 per cent in May, the same as in April and compared with the 2.6 per cent peak rise a year earlier.
"While the stagnation is likely to persist over the next few months, there are clear signs that the market is bottoming out," said John Wriglesworth, housing market economist at Hometrack.
House prices are a key economic indicator in Britain where two-thirds of families own their homes, and prices are closely watched by the Bank of England when setting rates.
In recent years Britons have taken advantage of the lowest interest rates in 48 years to borrow freely against the rising value of their homes, raising fears of a property crash that could destabilise the economy.
But Wriglesworth predicted prices would still grow by about 4 per cent this year. Earlier this month, the Bank of England revised its forecast for house prices sharply lower, predicting price rises would come to a halt in a year.
The more closely watched Nationwide building society house price survey will be released on Thursday.
PA