House prices have slowed down in the last quarter and are now almost at a standstill.
Recent Hometrack research highlights that house price growth was 0.6% in May, 0.3% in June, and 0.1% in July.
Thus the average property has gone up by only 5.9% over the last 12 months, less than the interest earned in lots of savings accounts.
Hometrack has seen that this slowdown has meant a lot of new homes entering the property market combined with increasing rising interest rates has made mortgages more expensive.
The steady interest rate increase which began in 2006 is likely to impact on levels of housing demand across the property market.
Demand is likely to remain weak over the next six months as the impact of higher interest rates affects the market.
The last year has seen five interest rate rises, taking Bank of England base rate from 4.5% to 5.75%. However, that is no thte only reason for underperformance.
This slowdown has been accelerated by an increase in the supply of housing for sale over recent months. And the current weakness in growth is set to continue.
Growth in supply seems to have settled. Demand is expected to remain weak over the next six months as the impact of higher interest rates feeds into the market.
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House Prices Slow Down
Mon, 30 Jul 2007
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