House price inflation slows in August
Published On 20 August 2007
House prices in the UK only increased slightly last month, a new study indicates.Figures released by Rightmove show that asking prices rose by just 0.6 per cent in August to £241,474. This comes after a 0.3 per cent rise in the previous month and indicates that interest rate increases could have slowed demand in the property market.
Prices in London also fell in August, dropping by 0.1 per cent. This is the first time house prices in the capital have dipped for a year.
Rightmove commercial director Miles Shipside commented: "This is the first time for over a year and a half that we have seen four consecutive months of such moderate increases.
"This much slower rate is consistent with prices and the market starting to adjust to the increased costs of home ownership. It finally paves the way for a return to a sustainable market without the need for further interest rate rises, though many buyers will still face affordability problems."
Recently the Royal Institution of Chartered Surveyors (Rics) suggested that new buyer enquires declined at their fastest pace since August 2004 in July.
At the time, Rics spokesman Jeremy Leaf explained: "With interest rates perched at 5.75 per cent and a jump to six per cent a strong possibility, aspiring first-time-buyers are continuing to rent until the market trend becomes clearer."
