Property Prices Grew By Their Slowest Rate For Some 18 Months, New Research Indicates

Category: Finance, Personal Finance.

Property prices grew by their slowest rate for some 18 months, new research indicates.

Figures from the firm indicated that London, Wales and the south- east of England were the only areas that had seen house prices rise over the course of the month. According to a study by Hometrack, the value of the average house increased by some 1 per cent over the course of July to 176, 300 pounds- the lowest monthly increase noted since the beginning of 200With the latest figures indicating the third consecutive month for a slowing in property price growth, year- on- year inflation was now reported to stand at 9 per cent, down from the 4 per cent recorded in June and the" recent high" of 8 per cent reached in April. With London said to have seen property values rise by 2 per cent, in comparison to the 8 per cent increase noted in March. Five regions across England were said to have exhibited constant house prices, with the east Midlands and the Yorkshire and Humber area posting decreases of 2 and 1 per cent respectively. The capital- which had been declared by Hometrack as the" engine for house price growth" over the last 12 months- was now said to have suffered from the downturn in market conditions witnessed across Britain. Richard Donnell, director of research for Hometrack, said: "It was inevitable that the steady increase in interest rates which began last year would ultimately impact on levels of housing demand right across the market- a trend that has been exacerbated by the seasonal slowdown in activity over the summer" .

This surge was attributed to estate agents encouraging would- be vendors to put their homes on the market ahead of what had been the original June 1st deadline for home information packs. Mr Donnell added that slowdown in price rises has been" accelerated" by a recent increase in the availability of housing put up for sale. However, he noted that overall demand for property is set to" remain weak" over the rest of 2007 as the effects of recent interest rate increases by the Bank of England make their presence felt on the housing sector. In a study conducted earlier this month, Bradford& Bingley indicated that 46 per cent of prospective first- time buyers are worried that houses are set to become more expensive during forthcoming months. Overall, property was reported to witness a further slowdown in growth as it moves more" towards a buyers' market" . Despite recent interest rates impacting upon consumers' day- to- day finances, just over a quarter of those surveyed stated that if they do not get on the property ladder now than they may be unable to do so in later life. However, with the most recent Bank of England base rate rise forcing borrowers on a typical 120, 000 pounds mortgage to find an extra 25 pounds every month to meet monthly repayments, Mr Wiggans warned potential first- time buyers against over- stretching themselves financially, "especially as there may be further rate rises to come" .

As a result, director of mortgages Andy Wiggans claimed that such consumers are now willing to take out a secured loan" at almost any cost" .