House price growth negative as demand slows...
14 September 2007
House price growth has gone into negative figures this month as the effect of interest rates weigh heavily on the UK property market, latest figures from the Royal Institution of Chartered Surveyors (Rics) reveal.
According to Rics' UK housing market survey, 1.8 per cent more chartered surveyors reported a fall rather than a rise in house prices, down from 10.8 per cent in July.
Furthermore, new buyer enquiries decreased for the ninth consecutive month, with buyers demonstrating caution as the effect of five interest rate rises since August 2006 starts to be felt.
Commenting on the figures, Rics spokesman, Ian Perry, said: "Potential house buyers have become far more cautious as they wait and see what affect interest rate rises will have on household finances.
"Affordability is at its most stretched in over a decade and many will worry that rising mortgage repayments will prove a step too far."
"The market will soften further, going into the autumn, reducing some impetus from those that have been chasing a rapidly moving target," he predicted.
He added that Home Information Packs (Hips) had reduced the number of four bedroom family properties coming onto the market, with family homes even more difficult to purchase.
