The current position of the UK housing market

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by Kay Murchie

After the huge property price increases of 2006, there are a number of issues to cloud the growth in 2007.

Many property experts believe the UK property market is slowing down after a period of ongoing growth. The primary reason has to be the rise of interest rates. In addition, confidence is dwindling about the economy’s prospects over the next 12 months, particularly job security.

In spite of this, the monthly pointers for June have shown differences of opinion in the market, with some analysts indicating that the slowdown is temporary. However, many insist that the recent trend is for a drop in property price growth rates.

A chief economist at the Halifax has commented that annual house price inflation will slow over the next few months due to the rises in mortgage rates and the persistence of negative real earnings growth.

Nationwide’s chief economist remarked that the heavy rain in June has done nothing to dampen the drive of the property market and house price inflation bounced back.

The property website, Rightmove, said that the stampede to beat the forthcoming Hips deadline attracted some poorly motivated sellers to the market. They are looking for cheap prices as there are a lot of houses up for sale.