House prices up, but market slowing
Oct 09, 2006
House prices rose by 1.0 per cent in August, new figures from the Halifax show.
The rise in prices to an average house price of £179,043 follows a rise of only 0.3 per cent in July and falls of 1.2 and 0.1 per cent in June and May respectively. However, despite the rise, there is evidence that the housing market is slowing down, said the company, with the overall increase in house prices in the past three months standing at 0.2 per cent, compared to a 2.9 per cent rise in the three months before that.
August's house price growth of 1.0 per cent this year was much smaller than the increase in August 2005 of 1.4 per cent. The small gains in house prices this month contributed to a slow down in the annual rate of house price inflation, from 9.4 per cent in June to 8.2 per cent in August. Halifax predicts that increasing constraints on house prices, such as energy bill increases and low housing affordability will cause house price inflation to ease.
Higher mortgage rates following the Bank of England's decision to raise interest rates recently and the step up in fixed rates that has occurred since the spring are likely to slow housing demand a spokesman at Halifax commented.
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