The property boom in Sussex is showing signs of slowing as the growth in house prices fell sharply.

A survey by the Halifax found an average house price rise in the South East of 1.4 per cent in the first quarter of this year compared with 7.9 per cent during the last three months of 1999.

But despite the slowdown, properties have still added 20.4 per cent to their values in the last year. A Halifax spokesman said: "In the whole South East it appears that the sharp rises in prices over the past year are making it increasingly difficult for potential buyers to enter the market, therefore curbing demand."

The average house price in Sussex is now £123,733, almost £40,000 above the national average. A Halifax spokesman said: "The favourable economic and affordability background should maintain a robust housing market during 2000. Nevertheless the four increases in interest rates since last September appear to be having an impact on demand as the slowdown indicates."

An influx in commuters unable to afford the high price of living in London has been blamed for the price rises in Sussex. Last week the Argus reported an estimated three out of four house-buying inquiries in Brighton and Hove come from people living in the capital.

David Goldin, regional director of Fox and Sons, said: "The fall in inflation could be seasonal. Prices are still strong and there's still high demand. It does seem to be levelling off a bit though.

In Greater London, the rise in house prices was four per cent in the last three months, compared with 8.5 per cent in the final quarter of 1999.

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