Demand for Property Dampens
House prices increased at their slowest rate for 18 months during July as higher interest rates continue to dampen demand for property.Property website Hometrack found the average cost of a home in England and Wales rose by 0.1% bringing the average property price to £176,300.
Meanwhile, the annual rate of house price inflation also slowed for a third month in a row, dropping from 6.4% in June to 5.9% in July.
Hometrack also said that London, a stalwart of the property sector is now starting to feel the pinch from interest rate rises. Prices in the capital rose by just 0.2% during July.
There were only three regions where house prices rose during the month - London, the South East and Wales, while prices remained static in five regions.
Prices fell in both the East Midlands and Yorkshire and Humberside during the month, dropping by 0.2% and 0.1% respectively.
Hometrack's director of research, Richard Donnell said: "It was inevitable that the steady increase in interest rates which began last year would ultimately impact on levels of housing demand right across the market - a trend that has been exacerbated by the seasonal slowdown in activity over the summer.
However, the slowdown has been accelerated by a rise in the supply of housing for sale over recent months. While the growth in supply across the country appears to have moderated, we expect demand to remain weak over the second half of the year as the impact of higher interest rates continues to feed into the market."
Mr Donnell added that the increase in the number of homes being put up for sale was probably due to estate agents encouraging people to market their homes ahead of the previous date for the introduction of Home Information Packs, which was originally June 1st, but now August 1st.
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