Housing market moderating
Posted: 07 Sep 2006 16:35:40 GMT
House price inflation has slowed in recent months and this pattern is expected to continue, according to new research.
The Halifax House Price Index has shown that house prices rose by one per cent in August and that the annual change has lowered to 8.2 per cent from June's 9.4 per cent rate.
Overall, in the three months from May to August, prices increased by 0.2 per cent, compared to the 2.9 per cent rise in the three months prior to May.
Martin Ellis, chief economist for Halifax, stated: "There are signs that the market is slowing.
"August's increase was smaller than the 1.4 per cent rise in August 2005, contributing to a slowdown in the annual rate of house price inflation to 8.2 per cent from 9.4 pre cent in June."
Mr Ellis also commented: "We expect this trend to continue over the coming months with the annual rate easing to five per cent by the end of the year."
Sound fundamentals underpin the strength of the current market but certain limiting factors are expected to curb the price boom seen in the first half of this year.
The Bank of England's interest rate rise in August and the rising cost of amenities has put pressure on new homeowners.
News of the simmering of house prices will be welcomed by first-time buyers who are looking to get a foothold on the housing ladder.