30 Jul

House price growth slows down

House price growth slows down

House prices across England and Wales increased by 0.1 per cent in July, according to the latest index.

According to Hometrack's July Housing Survey it was the lowest level of growth for more than a month since February 2013.

In particular, the London market showed a significant slowdown and a number of seasonal factors may also have impacted on property values across the country.

Adding in tougher lending requirements as part of the Mortgage Market Review, some parts of the capital city are now reporting a decline in property values as buyer demand relaxes.

There was a fall of 0.9 per cent in the number of prospective buyers and movers registering with agents - suggesting a narrowing of the gap between supply and demand over the past three months.

Overall, less than 25 per cent of postcode districts recorded a price rise in July, nearly half that seen at the start of the spring, when 50 per cent were reporting an increase in values.

London's momentum of price rises in the London market slowed over the last few months. In July, 12 per cent of London postcodes reported price gains 11% of London markets actually recorded lower prices over the month.

Data also revealed that the proportion of sellers achieving asking prices has started to decline. Although still high at 96.1 per cent - it is below May's 96.8 per cent.

Asking prices were also harder to achieve in London, with a fall from 99 per cent to 97.5 per cent over the past two months.

"Seasonal factors always lead to a slowdown in demand and market activity in the summer months, but it is clear that there are bigger forces at work with a pronounced loss of momentum in the London housing market in the last three months," said Richard Donnell, director of research at Hometrack.

He added: "The lead indicators in the survey have pointed to a slowdown in the rate of growth for the last two months, in part due to warnings from the Bank of England and others of a possible house price bubble. Demand for mortgages has also been slowing for several months now."

It was also revealed that the time a property remains on the market is starting to increase. Nationally it remains at around six weeks but there has been a rise in the capital from a low of 2.7 weeks in March to 4.3 weeks in June - there was also a slight increase in the south east.ADNFCR-1222-ID-801738558-ADNFCR

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