Property prices continue to grow

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by Kay Murchie

Property prices surprisingly jumped in June – the biggest increase since December. This lifted the annual pace of increase to 11.1% - the strongest rate in over 2 years. Despite concerns of a slowdown, the figures show that the growth in the property market is still continuing.

These figures contradict other information such as mortgage approvals affected by interest rate rises.

The cost of an average UK property is now at £184,000, more than £18,000 one year ago – this is equal to an increase of £50 per day.

Market analysts are forecasting that the Bank of England will raise interest rates to 6% before the end of 2007 – this is likely to put off many potential house buyers, along with the pressures of unaffordable housing.

In addition, a considerable amount of homeowners will see their mortgage bills increase during the latter half of 2007 as fixed rates taken out 2 years ago are due to expire.