* China property fears send ShFE copper to over-3-month low * Rise in new housing price sales decelerates in January * Banks start to tighten lending to property sector -media (Updates prices, adds comment, changes dateline from SYDNEY) By Susan Thomas LONDON, Feb 24 (Reuters) - Copper fell on Monday to its lowest in more than two weeks as the growth in new housing prices in China slowed in January and worries about credit restrictions in the country's huge property sector hurt the demand outlook for metals. China accounts for more than 40 percent of global consumption of copper, which is used extensively in construction and power cables. Any curbs to financing and property development is likely to erode that demand. Three-month copper on the London Metal Exchange slid 1.2 percent to $7,071 a tonne by 1101 GMT, off an intraday low of $7,055, its lowest since Feb. 6. New housing prices in China rose 9.6 percent in January from a year earlier, but decelerated month-on-month for the first time in a year. "That was the main reason why we saw weakness in copper but also across the board in base metals," Vicky Sanders, head of analytics sales at Marex Spectron, said. "It was only a small change month on month but it's really about momentum." Furthermore, she said, local news reports suggested that banks had started to tighten lending to the property sector and related industries. The official Shanghai Securities News reported on Monday that Industrial Bank and other banks may have stopped extending some loans to property developers and tightened lending to other property-related sectors such as steel, cement and construction. Local media reported that several banks had issued denials. The most-traded May copper contract on the Shanghai Futures Exchange slid to a more than three-month low before trading at 49,900 yuan ($8,200), a drop of 1.2 percent. Copper prices have traded in a narrow range just above $7,000 per tonne since August, and traded in a $200 range for most of February. "Base metals have been relatively tepid since August last year. So volatility will attract activity and it's good to see some response in base metals," Sanders said. "In copper, we're still at the lower range of what we've been in, but if we were to break through $7,000 then we might see volumes pick up within days." Tighter monetary policies in China and the United States have fanned concerns there will be less cheap liquidity on hand for industry and investors, compounding worries that stuttering growth in the world's top two economies could derail a global recovery. In the United States, severe cold weather and a shortage of houses on the market pushed home resales to an 18-month low in January, the latest indication economic activity has hit a soft patch. Metals prices could still climb, driven by technical buying, Barclays said in a research note. "Sizeable short positions have built in copper, zinc and nickel, leaving the market vulnerable to short-covering rallies and raising the prospect of big rises in reported inventories if metal is attracted on-warrant by tightening in time spreads," the bank said in the note. Selling spilled across to other metals. LME benchmark three-month aluminium fell 1.2 percent to $1,749 per tonne and lead fell $1.2 percent to $2,124.

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