Property News Item: 00522

3rd Oct 2007

Pace of price inflation slowing

Source: http://www.chesterton.co.uk

The latest Chesterton meta-index shows that the average price of a residential property in England and Wales is now £198,422.

Although many factors are starting to cause a readjustment in house prices, they are unlikely to turn negative. The factors that have put downwards pressure on house price growth are:
* Rise in interest rates throughout 2006 and 2007;
* Introduction of Home Improvement Packs, which distorted the number of houses on the market;
* Increase in lending standards;
* Rise in the cost of credit;
* Reductions in bonus payouts;
* Fall in consumer confidence

Prices have risen by +9.4% between September 2006 and September 2007. Property price inflation over the last quarter has fallen from an annual rate of +10.6% in July, suggesting the market is slowing.

The rate of residential property price growth in the top 20% of the market remained at +1.2% month-on-month in September. Houses in the bottom 20% of the market grew by +0.4% month-on month compared to +0.6% in August.

Monthly inflation has rebounded upwards to +0.6%, following a modest monthly rise in August of just +0.1%.

The rate of residential property price growth in the top 20% of the market remained at +1.2% month-on-month in September. Houses in the bottom 20% of the market grew by +0.4% month-on month compared to +0.6% in August. The annual rate remained stable, falling to +6.8% from +7.0% in August.