Average national asking prices rise by just 0.3% to £240,001, the lowest monthly rise this year, with the annual rate falling sharply from 13.2% to 10.3%, reports Rightmove in its July analysis of house prices from estate agents.
This year's third interest rate rise has coincided with the lowest monthly asking price
increase recorded so far in 2007. The last time growth was this low was December 2006 with -0.3% and September 2006 with a 0.2% increase. Average national asking prices rose by just 0.3% (£684) as sellers flattened their price expectations.
Between January and April asking prices rose by 6.1%, from £222,859 to £236,490. Between April and July they rose by only a further 1.5%, to £240.001. As a consequence, the annual rate of house price inflation has dropped sharply from 13.2% to 10.3%, the lowest yearly rate since it stood at 9.8% in September 2006.
Miles Shipside, Commercial Director of Rightmove comments: "This is further evidence that the 'mini boom' is coming to an end. As long as employment remains buoyant, prices are likely to remain broadly at these levels. However, depending on local supply and demand, sellers are going to have to duck and weave with their asking prices, especially if there is another rise in interest rates."
Instead of the traditional North-South divide, we now have a divide between London and the rest of the country. While the London market continues to show signs of cooling, the annual rate of increase is virtually double all other regions of the country. The closest contender to London's 21.7% annual increase is the Yorkshire and Humberside region where prices have risen by 11.4%. Even the capital's neighbours in the South East and East Anglia have a rate less than half that of London, at 10% and 10.4% respectively. Miles Shipside comments: "Shortages of supply will remain more acute in the capital, as suitable building land is harder to come by and demand will continue to grow as the City strives to become the financial capital of the world. The consequent upwards pressure on prices can be absorbed by highly paid City workers, but it exacerbates the existing problems for key workers and first time buyers in London".
