July increases at odds with later findings

The Department for Local Communities and Government (DCLG) has reported that price inflation rose again in July, but analysts have suggested that such rises will be negated by impact of global financial problems that materialised later in the summer.

The DCLG data, found that annual price inflation rose to 12.4 per cent in July from 12.1 per cent in June.

Though this is not the only study to contradict widely-reported claims of a slowdown in the housing market, the Royal Institution of Chartered Surveyors (Rics) has said that the credit crunch means lending restrictions will tighten in the future.

"Even without a material round of job losses in the financial services industry, which is an increasing risk, we would expect house price inflation to slow sharply over the coming months as access to mortgagefinance is disrupted particularly for higher risk borrowers," commented Rics chief economist Simon Rubinsohn.

Last week Firstrung suggested that the major lenders are already "cherry-picking" which first time buyers they lend to as a result of the problems on the global markets.


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