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House price growth judders to halt

30/07/2007

Britain's housing market slowed to a virtual standstill in July, according to residential specialists Hometrack.

Its latest monthly housing market survey found that price growth fell from 0.6 per cent in May and 0.3 per cent in June to just 0.1 per cent in July, dragging the year-on-year rate of growth down to 5.9 per cent.

Five quarter-point interest rate hikes in the last 12 months have been widely held as responsible for the slowdown seen this spring and summer, making borrowing more difficult as high demand prevents an affordability crisis from taking hold.

Hometrack's director of research, Richard Donnell, suggested the dampening market had also been affected by a glut of new stock coming onto the market, however.

"The slowdown has been accelerated by a rise in the supply of housing for sale over recent months," he explained, before pointing out that the seasonal dip in activity was also contributing.

Mr Donnell concluded by predicting that a repeat of last autumn and winter's performance, when the market accelerated beyond pundits' expectations, is unlikely.

"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," he added.

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