House price growth ground to a halt in March as fears over the war with Iraq caused people to put their moving plans on hold, research claimed today.

Prices in England and Wales remained flat during the four weeks to mid-March, although this masked widespread falls in London and the South-East, according to property web site hometrack.

The rate of growth has been slowing since it peaked at 2.6 per cent in May and March's 0 per cent change follows rises of just 0.1 per cent in February, January and December.

Overall, 17 counties reported price falls, while in 14 counties the cost of property remained flat.

The highest price falls were in central London and the City, where prices fell 0.4 per cent, followed by Wiltshire and Surrey where they dropped 0.3 per cent.

However, in Cumbria, Yorkshire, mid Wales and North Lincolnshire prices rose.

John Wriglesworth, hometrack's housing economist, said: "House price stagnation looks set to continue, led by a marked slowdown in activity in London and the South-East.

"Despite low interest rates, high employment and growing income, the heat has definitely left the market.

"Prospective home hunters are holding back from buying, not least due to worries and insecurity over the consequences of the war with Iraq.

"Fear dissuades people from moving and they stay put."

But he added there was still more scope for price increases in many areas where property remained relatively affordable, particularly in the North of England.

Wednesday March 26 2003