House price inflation beginning to cool
Published On 28 March 2007
Recent interest rates rises are finally beginning to affect the number of people taking out mortgages, the latest figures have revealed.According to the Nationwide, the annual rate of house price inflation slowed from 10.2 per cent in February to 9.3 per cent in March, while a monthly 0.4 per cent rise in property prices put the average cost of a property at £177,083.
Nationwide's chief economist Fionnuala Earley said: "While the annual rate of house price inflation has yo-yoed over the last few months, the underlying trend is clearly softening as interest rate rises take effect.
"Not only are insufficient numbers of homeowners putting their properties on the market, but levels of house building continue to undershoot the levels of demand," she added.
The Bank of England has increased interest rates three times since last summer and experts believe that the rises are only now beginning to influence the housing market.
The Nationwide also announced it maintained its belief that house prices would continue to rise in 2007, although not at the same speed they have been increasing in the past couple of years.
In the last year, house prices in the UK have gone up by an average of £15,000, which is an average rise of £1,250 each month.
