A soaring number of estate agents have reported a drop in house prices in the West Midlands, a study has found.
The Royal Institution of Chartered Surveyors (RICS) report yesterday came as separate Government study showed a year-on-year fall in price inflation in the region.
The RICS found the number of members in its survey reporting a price drop "increased to 22 per cent last month, up from eight per cent in June".
However, 28 per cent of s urveyors reported an increase and 49 per cent reported no change in prices.
That indicated "a slower pace of price increases during July".
The RICS said house prices in the region continued to rise during July at a modest rate, while agreed sales rose at their fastest pace in almost three years.
RICS spokesman Richard Franklin said the West Midlands had a very balanced market recently with supply and demand quite evenly matched.
He said: "Over the coming months the recent interest rate increase may have a significant impact on our steady market, especially if the talk of an extra quarter percent increase before Christmas becomes a reality.
The "blossoming market" from late August throughout early Autumn, would depend on the timing of the Bank of England's decisions in months to come. The findings came as the Department for Communities and Local Government revealed values in the West Midlands rose at 4.4 per cent in June compared with 5.6 per cent a year earlier.
The average value of a house in the region was £169,119 in June, up from 167,068 in May and £163,621 in June last year.
Nationally, the rate that values were rising also fell, largely because of a modest slowdown in the pace of growth in London, the study showed.
The average house price in the UK stood at £190,883, up from 190,065 in May.
That means annual house price inflation in June 2006 was 5.2 per cent, down from 5.6 per cent in May.
The highest year-on-year inflation rate was in Yorkshire and the Humber (6.7 per cent) followed by London (5.8 percent), North East (5.5 percent) and South West (five per cent).
Inflation rates were lower in other parts of England including the North West (4.9 per cent), and the South East (4.3 per cent) as well as the West Midlands (4.4 per cent) -with lowest in the East Midlands (1.9 per cent) and the East (2.8 per cent).
Prices for first-time buyers rose at an annual rate of 6.8 per cent, outstripping the overall UK rate, with newcomers paying out an average of £149,215.