House price growth slowdown confirmed

House price growth slumped in July, according to a new report published by Hometrack.

According to the firm's Monthly National Housing Survey, prices grew by just 0.1 per cent, the lowest rate since January 2006.

The figure corresponds with the growth reported in the latest Nationwide House Price Report for the same month and is the latest sign that recent base rate rises are beginning to take effect.

July was the third consecutive month that house price growth decreased, with figures of 06 per cent and 0.3 per cent recorded in May and June respectively.

"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," said Richard Donnell, Hometrack's director of research.

"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 continue to feed into the market," he added.

The report outlined that the reported growth in supply may have been a result of people trying to sell their homes before the introduction of Home information packs on August 1st.



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