House price growth slows

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by Kay Murchie

Hometrack, the housing intelligence business, has reported that many areas in the UK have not seen an increase in property prices and some have noted price falls over the past month. This is the fifth consecutive month that house price growth has slowed and a poor housing performance has not been seen since November 2005.

Hometrack commented that weaker market conditions are anticipated over the summer and its survey is confirmation of a slowdown resulting from careful buyers and increased affordability problems.

A spokesperson for Hometrack commented that the housing market faces a difficult time during the rest of 2007. Rising interest rates have pushed average debt servicing costs to a 15-year high and this will continue to have an affect on levels of market activity and house price inflation over the next 12-18 months.

Hometrack added that global stock market instability was another factor affecting the property market and if this carries on, it is expected to further undermine market sentiment which will drive weaker levels of demand into the autumn and further undermine the rate of house price growth.

The Hometrack survey discovered that while London has been the only region to record a price increase over August, 3 regions - Yorkshire and Humberside, the North and the South West – have recorded price falls, albeit of less than 1%.