14 August 2007The number of people looking to buy a new home fell at its fastest rate for three years during July, new figures have shown.
It has led to speculation that the market may have peaked.
The Royal Institution of Chartered Surveyors said with interest rates now 5.75%, and expected to rise to 6%, many first-time buyers were continuing to rent while they waited to see what would happen to the property market.
Despite the slowdown in demand, house prices still rose for the 21st month in a row during July.
RICS spokesman Jeremy Leaf said: "The combination of softening demand and supply is causing market conditions to weaken further.
"Buyer activity has pulled back a little over fears that we may have seen the top of the market."
The figures come as the Government reported an unexpected rebound in house price growth during June.
The Department for Communities and Local Government said annual house price inflation was running at its highest level for more than two years at 12.1%.
Northern Ireland and London continued to see the strongest house price growth in the UK, while growth picked up slightly in the South East.
In other regions of England the market remained subdued, while in Scotland the rate of gains nearly halved, and there were moderate price falls in East Anglia, the East Midlands and Wales.
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