The slowdown in the housing market is becoming firmly established, according to the Royal Institution of Chartered Surveyors (Rics).

And commenting on the latest figures from the UK-wide Halifax house price index, published today, Rics suggested that the continued upward movement of mortgage rates would further impact upon the prospects of first time buyers.

Halifax figures for May suggest a nationwide average annual price growth of 10.6 per cent, with a monthly increase of 0.3 per cent - the third consecutive month of slowing in the growth rate.

The figures are likely to be of interest to developers of new homes, given that David Stubbs, senior economist for Rics, predicted: "Although the housing market will continue to slow in coming months, good economic conditions and a lack of homes for sale will continue to support prices and prevent the crash that some commentators continue to predict."

He added that, should interest rates increase to six per cent, a sharper slowdown in the market could be expected, with a "difficult 2008... on the cards".