Rics: House rise growth ‘weak’ after rate rise
July 13, 2007 by admin
Filed under News, News-Mortgages
House price growth is slowing, figures released today suggest.
The monthly housing activity report of the Royal Institute of Chartered Surveyors (Rics) shows overall rates of inflation being cut in half across much of England and Wales, although significant increases in prices were recorded elsewhere.
Nevertheless, new buyer enquiries – an excellent predictor for future developments in the market – also declined at a pace unmatched since early 2006, signalling that buyers feel that homes are becoming increasingly difficult to afford.
General confidence in the sales outlook from surveyors, also polled for the report, showed a significant drop. Ian Perry of Rics said that prices “have finally started to cool significantly”.
A major factor behind this apparent cooling off of the market might be the Bank of England’s decision to raise interest rates last week, with Mr Perry adding that “interest rate hikes have begun to affect the psychology of the market with potential new buyers starting to think twice before buying a home.”
However, sceptical voices were raised in the city today. Malcolm Barr at JP Morgan told Reuters that the Rics report was not a failsafe indicator of the market: “The signals coming out of housing are not strong enough to point to a marked slowing in spending in the near term”, he counselled.
