Signs of house price growth cooling
Posted: 31 May 2006 10:01:17 GMT
Two separate reports today suggest that house price increases in the UK are starting to slow down.
According to property market analysts Hometrack, two postcodes out of every three saw house prices remain static in May and London was the only area to see significant gains.
The capital actually saw prices climb by 1.2 per cent, but Richard Donnell, Hometrack's director of research, warned that this is not an accurate reflection of the overall picture.
"The London effect has been flattering the overall picture of a relatively buoyant housing market. The reality is that house price growth remains limited across large parts of the country," he admitted.
Nationwide has also released its May housing report today and it points to a similar scenario. Figures suggest that house prices climbed by 0.2 per cent in May and this was the second consecutive month of neutral growth.
Nonetheless, despite annual house price growth apparently still below five per cent, Nationwide is indicating that activity in the market is exceptionally high and there appears to be strong potential for growth in the months to come.
It remains difficult to predict the future of the market, with strong figures in London contrasting with relative stagnancy elsewhere.
Potential changes to interest rates will undoubtedly have an impact and many analysts are suggesting that a rise is more than likely before the end of the year.