Britain's FTSE hit by fall in housebuilder and airline stocks

* FTSE 100 down 0.3 pct

* Housebuilders hit by comments from BoE's Miles

* Rise in oil price hurts airline stocks

By Sudip Kar-Gupta

LONDON, June 23 (Reuters) - Britain's top equity index fell on Monday for the first time in a week as declines in housebuilding and airline shares weighed on the market, which had been approaching record highs.

The blue-chip FTSE 100 index, which had risen for the last four sessions, was down by 0.3 percent, or 18.30 points, at 6,806.90 by the middle of the trading day - some 2 percent below a record high of 6,950.60 points reached in December 1999.

Housebuilder Barratt Developments was the worst-performing FTSE stock in percentage terms, declining by 3 percent, while rival Persimmon (Frankfurt: OHP.F - news) fell 2.2 percent.

The companies were hit by comments over the weekend from Bank of England (BoE) policymaker David Miles, one of the central bank's most dovish members, who said it was increasingly likely he would vote to raise interest rates before leaving the BoE's monetary policy committee next May.

The housebuilding and property sector has been one of the best-performing segments of the UK stock market over the last year, as record low interest rates and home-buying incentives pushed the FTSE 350 Construction & Building Materials Index up 23.4 percent last year.

However, the likelihood that interest rates may rise over the coming year has since tempered its performance, and the construction & building materials index fell 1.5 percent on Monday.

"Interest rates may be rising sooner rather than later, and that's been the cause for a bit of a backlash for the housebuilders," said JNF Capital trader Rick Jones.

Airline stocks also suffered as the oil price, a large cost for airlines, rose above $115 a barrel on concerns over possible disruptions to supply from Iraq where Sunni insurgents seized control of more towns over the weekend.

EasyJet (Other OTC: ESYJY - news) fell 1.8 percent, while British Airways-owner International Consolidated Airlines Group dropped 1.3 percent.

"There's a pretty worrying picture in Iraq, and we're seeing that reflected in the oil price," said IG (LSE: IGG.L - news) analyst Alastair McCaig. (Additional reporting by Alistair Smout; Editing by Susan Fenton)