British new car sales recorded their best first half to a year since 2005, figures showed yesterday, but sales growth slowed in June as consumer demand started to level off.

The Society of Motor Manufacturers and Traders (SMMT) said new car registrations totalled 228,291 last month, up 6.2 per cent on a year earlier.

In the first six months of 2014, registrations were nearly 1.3 million, a 10.6 per cent rise on the same period in 2013.

“The overall market has risen faster than we were expecting but, after a bumper March, growth is showing signs of stabilising around our forecast level,” said Mike Hawes, SMMT chief executive.

Analysts say record low interest rates and a recovering economy has given consumers the confidence to buy more big ticket items.

But sluggish wage growth could be a challenge, in particular if interest rates begin to rise. The Bank of England has indicated this could happen as soon as this year.

“One concern for car manufacturers is that current muted earnings growth threatens to be a constraint for car sales,” Howard Archer, chief UK economist at IHS Global Insight said.

Sales slowed from an annual increase of 7.7 per cent in May and 8.2 per cent in April, and Barclays – which provides finance to car buyers and dealers – said it had seen anecdotal evidence that this trend would continue.

Still, the SMMT said the market was on track for 2.4 million new car registrations in 2014, up more than 6 per cent on last year.

Ford’s Fiesta supermini and General Motors’ rival Vauxhall Corsa were the two bestselling cars in June, followed by Ford’s mid-sized Focus and the Volkswagen Golf.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.