The August Edition of Rightmove's House Price Index records a monthly rise of 0.6%, which is the fourth time sellers have pitched their prices at less than 1% above the previous month, a pattern not seen since January 2006. Should this trend continue, it would be consistent with the annual rate of house price inflation becoming more closely aligned with annual wage inflation, currently running at around 3% to 4%.
However, the rise of 0.6% in August also needs to be compared with the rise of just 0.3% for July, and the year on year figures show an annual increase of 12.8% in August, up from 10.3% in July.
Miles Shipside, Commercial Director of Rightmove comments: "This is the first time for over a year and a half that we have seen four consecutive months of such moderate increases. This much slower rate is consistent with prices and the market starting to adjust to the increased costs of home ownership. It finally paves the way for a return to a sustainable market without the need for further interest rate rises, though many buyers will still face affordability problems".
A further early indicator of the future direction of the property market is the first monthly fall in London's average asking prices since August 2006. The fall was slight at just 0.1% (£462), but is put into context by the fact that London prices have risen by an average of 2% a month for the last 12 months. The strength of the London market has been one of the main driving forces behind the rise in national average prices. London's annual rate of increase is currently 23.4%, and is nearly double the national rate of increase which stands at 12.8% this month.
