LONDON, July 10, 2008 (AFP) - House prices in Britain slumped 6.1 percent in June compared with the same month last year, the largest decline for more than 15 years, home loans provider Halifax said on Thursday.

The news that prices fell by the fastest annual rate since March 1993, prompted warnings from economists that the country's property market downturn could worsen.

Halifax, part of British banking group HBOS, added in its latest monthly survey that house prices dropped by 2.0 percent in June from May.

'Today's data does nothing to dilute concerns that the housing market is in the initial stages of an extremely sharp correction,' said Capital Economics analyst Seema Shah.

'Slowing economic activity, combined with continued problems in the mortgage markets, suggest that further sharp falls lie in the pipeline,' he added.

The latest evidence of Britain's troubled housing market came on the same day that the Bank of England held its key interest rate at 5.0 percent as it sought to combat rising inflation and slower economic growth.

The average cost of a property in Britain stood at 180,344 pounds (226,641 euros, 356,387 dollars) in June, Halifax added.

'A strong labour market, low interest rates and a shortage of new houses underpin housing valuations,' said Halifax chief economist Martin Ellis.

At the same time, however, British home builders are slashing thousands of jobs as they struggle to find enough people to buy new homes.

Barratt said on Thursday it was axing 1,200 jobs owing to a 'significant downturn' in the British housing market since April.