House price growth up again

Despite recent studies asserting that house price growth is now slowing down, the latest house price index from Halifax has found that July saw a 0.3 per cent increase in price inflation.

However, July's rate of growth was still just 0.7 per cent, up from 0.4 per cent in June, with Halifax reporting that the three month growth rate of 1.3 per cent is the lowest seen since last August.

Strong economic fundamentals have nonetheless seen the lender revise its long term growth forecast for 2007 upwards from four per cent to six per cent.

"We expect the downward trend in house price growth to continue as the five interest rate rises since last summer have an increasing impact on household spending and housing demand," commented Martin Ellis, chief economist at Halifax.

"Sound economic fundamentals, high levels of employment and a shortage in the number of properties available for sale, particularly in London and the south-east, will, however, continue to support house prices," Mr Ellis added.

Last month Nationwide's own index reported that house price growth in July stood at just 0.1 per cent.


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