Interest Rates 'Curbing' House Price Growth

Property terms grew by their slowest charge per unit for some 18 months, new research indicates.

The value of the norm house increased by some 0.1 per cent over the course of study of July to 176,300 lbs - the last monthly addition noted since the beginning of 2006. With the up-to-the-minute figs indicating the 3rd sequent calendar calendar month for a deceleration in place terms growth, year-on-year inflation was now reported to stand up at 5.9 per cent, down from the 6.4 per cent recorded in June and the "recent high" of 6.8 per cent reached in April.

Figures from the house indicated that London, Cymru and the south-east of England were the lone countries that had seen house terms rise over the course of study of the month. With Greater London said to have got seen place values rise by 0.2 per cent, in comparing to the 1.8 per cent addition noted in March. The working capital - which had been declared by Hometrack as the "engine for house terms growth" over the last 12 calendar months - was now said to have got suffered from the downswing in marketplace statuses witnessed across Britain. Five parts across England were said to have got exhibited changeless house prices, with the east Midlands and the Yorkshire and Humber country posting lessenings of 0.2 and 0.1 per cent respectively.

Richard Donnell, manager of research for Hometrack, said: "It was inevitable that the steady addition in involvement rates which began last twelvemonth would ultimately impact on degrees of lodging demand right across the marketplace - a tendency that have been exacerbated by the seasonal lag in activity over the summer." Mister Donnell added that lag in terms rises have been "accelerated" by a recent addition in the handiness of lodging set up for sale. This rush was attributed to estate agents encouraging would-be vendors to set their places on the marketplace ahead of what had been the original June 1st deadline for place information packs. However, he noted that overall demand for place is put to "remain weak" over the remainder of 2007 as the personal effects of recent involvement charge per unit additions by the Depository Financial Institution of England do their presence felt on the lodging sector. Overall, place was reported to witnesser a additional lag in growing as it travels more than than "towards a buyers' market".

In a survey conducted earlier this month, William Bradford & Bingley indicated that 46 per cent of prospective first-time purchasers are worried that houses are put to go more expensive during extroverted months. Despite recent involvement rates impacting upon consumers' day-to-day finances, just over a one-fourth of those surveyed stated that if they make not acquire on the place ladder now than they may be not able to make so in later life. As a result, manager of mortgages Andy Wiggans claimed that such as consumers are now willing to take out a barred loan "at almost any cost". However, with the most recent Depository Financial Institution of England alkali charge per unit rise forcing borrowers on a typical £120,000 mortgage to happen an other £25 every calendar month to ran into monthly repayments, Mister Wiggans warned possible first-time buyers against over-stretching themselves financially, "especially as there may be additional charge per unit rises to come".