House <a href="https://www.thenationalnews.com/world/uk-news/2023/06/01/uk-property-prices-fall-again/" target="_blank">prices in the UK </a>are showing signs of stability after figures from Nationwide on Friday showed a modest 0.1 per cent rise in June, reversing a 0.1 per cent month-on-month decline in May. Nonetheless, prices were 3.5 per cent lower in June this year than they were in the same month last year. May's annual figure was a drop of 3.4 per cent. Nationwide's chief economist, Robert Gardner, said that the <a href="https://www.thenationalnews.com/world/uk-news/2023/06/22/uk-interest-rates-raised-to-5/" target="_blank">13 increases in UK interest rates </a>have yet to make serious <a href="https://www.thenationalnews.com/world/uk-news/2023/06/20/why-uk-mortgage-payers-are-facing-further-pain/" target="_blank">dents in demand</a> in the housing market, as illustrated by the continuing rise in mortgage approval numbers. However, in future the cost of borrowing will have an effect. “The sharp increase in borrowing costs is likely to exert a significant drag on housing market activity in the near term," Mr Gardner said. "For example, for a representative first-time buyer earning the average wage and buying the typical property with a 20 per cent deposit, mortgage payments as a share of take-home pay are now well above the long-run average." With the Bank of England expected to raise interest rates to 6 per cent by the end of the year, a distinct chill is expected to blow through the UK's housing market by the winter. "As the markets bet on more rate hikes this year, with interest rates potentially peaking at 6 per cent – or even higher – as the Bank of England battles to extinguish the persistent inflation fire, the property market is in for a rough ride," said Alice Haine, personal finance analyst at Bestinvest. "Worsening interest-rate expectations have led to big movements in the bond markets, and as bond yields rise so do swap rates, which lenders use to price home loans."