House prices still on the up as prices bounce back
UK house price growth ‘bounced back’ in June, with prices rising 1.1%, according to the latest property price survey from Nationwide.
This was a stronger than forecast performance and lifted the annual rate of growth from 10.3% in May to 11.1% now.
Nationwide reported that prices were rising twice as fast as last year, with the average house now costing £184,070. However, it did add that this growth rate would slow in the second half of the year as rate rises began to bite.
Fionnuala Earley, Nationwide’s chief economist, said: “Despite June’s uptick in inflation, the housing market is showing some signs of ‘softening’.
“Estate agents are continuing to show a fall in the number of new buyer enquiries, and house builders are also registering falls in the number of site visitors.”
She added: “The key reason for the slackening of pace is the increase in the interest rates, which have been put up four times since last August, rising from 4.5% to 5.5%.”
With many analysts predicting a further rate rise in July it is expected that homeowners’ finances will become increasingly pressurised during the remainder of 2007.
But Earley said that the continued energy of the housing market would “add to the rate rise camp’s argument”.