17 July 2007The market is continuing to slow down, according to a survey by Hometrack, a consultancy that analyses estate agents’ sales data. It says that the monthly rate of house-price growth halved in June, with average prices rising by 0.3%, compared to 0.6% in May. This takes down the annual rate of house-price growth to 6.4%, from 6.7% a month earlier. The trend is expected to continue in the second half of the year, with more homes on sale, especially in London and southeast England, and demand weakening in response to higher interest rates.
- Nevertheless, Land Registry figures reveal that the picture in England and Wales varies widely, even in neighbouring areas. During May, prices fell in 33 of the 187 local-authority areas, with the largest drops in Torfaen, Wales, down 2.2%, and Bury, Lancashire, down 1.7%. The highest monthly rises were in Oldham, Lancashire, up 2.6%, and Neath and Port Talbot, Wales, up 2.4%. The areas with the highest annual rate of growth were all in London – Kensington & Chelsea (up 23.4%), Hammersmith & Fulham (up 21.1%) and Camden (up 19.5%).
- Even in central London, the boom shows signs of slowing down, according to two separate reports. The estate agent Savills says that prices in Notting Hill, Mayfair, Bayswater and the West End rose by 5.7% in the second quarter of the year, down from 8.8% in the first quarter. The firm nevertheless believes the market will end the year 20% up on January. Another report, from the Jones Lang LaSalle Residential consultancy, says that central London prices will grow by 1%-2% more than in the rest of the country in the second half of the year because of a continuing stock shortage. However, it warns that “the extraordinary pace of price growth in the prime market, reaching in excess of 25%, is now tempering”.
- Falling rental returns mean there will be fewer buy-to-let purchases by landlords over the rest of this year, making more homes available to first-time buyers, the Nationwide predicts. “Yields for new entrants to the buy-to-let market are being squeezed significantly,” says Fionnualla Earley, chief economist at the building society.
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