UK Housing Market Shows Signs of Slowing Down

U.K. house prices rose in June at the slowest pace since December as higher interest rates deterred buyers, according to the latest figures.The average cost of a home in England and Wales increased 0.3 percent from May, to £176,100 , matching the rate of increase in December 2006.

A survey conducted by Bloomberg News Survey stated that the Bank of England will raise interest rates on July 5 from the current six-year high, according to 53 out of 60 economists surveyed.  If this is so then the housing market will continue to slow down.

Less2sell estate agents have seen faltering demand for properties resulting from an increases in interest rates and the rush to market properties before 1st June in anticipation of the introduction of Home Information Packs. 

A fifth interest -rate increases (which we at Less2sell feel is 90% possible) since August to 5.75 percent and the prospect of further rises are keeping prospective buyers out of the market.

The annual rate of growth fell to 6.4% from 6.7% the previous month. We at Less2sell are predicting this rate to continue to decline and end up arond 4-5% in December.

With UK inflation at 2.5% (target 2%) and the fact that we only just escaped a rise in June, an increase in interest rates by 0.25% in July is almost guaranteed.

This entry was posted on 02/07/2007 at 08:50 pm and is filed under UK Interest rates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.

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