Rightmove: house price boom is over

Friday, 31 August 2007 12:00 AM

Asking prices for property in the UK have increased by only 0.6 per cent over the past month according to research released today by RightMove.co.uk.

The average house price in the UK now stands at £241,474, up from £240,001 in July.

RightMove now predicts asking prices will increase 12.8 per cent annually.

This is the fourth month in succession that asking prices have increased less than one per cent on the month before; a trend not seen since January 2006.

If this continues house price growth could fall to an annual level of between three and four per cent, in-line with increases in wages.

These moderate increases in house prices have reduced the pressure on the Bank of England to increase interests rates further, feels RightMove.

"This much slower rate is consistent with prices and the market starting to adjust to the increased costs of home ownership," commented Miles Shipside, commercial director at Rightmove.

"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."

Prices in London fell for the first time in over a year, 0.1 per cent lower in August than during July.

This is in comparison to the previous twelve months, in each of which prices have increased by at least two per cent.

Up to 148,000 new properties were placed on the market in July, the lowest level since the beginning of the year.

However, stock levels remained static, suggesting fewer properties were being sold. The time it took to sell a property also increased to an average of 85 days, up from 80 days in July.

"Whilst a slower market is to be expected in the summer holiday season, it shows that the balance of power has switched from seller to buyer in most parts of the country," Mr Shipside concluded.

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