House prices rose again in July, according to the latest national house price survey from Hometrack. The new figures show a 0.6% price rise over the last month, bringing this year’s growth to 3.2%.
The relentless strength of the London market flatter July’s results. Across the rest of the country the survey pointed to a slowing market ? a trend Hometrack expects will continue for the rest of summer and into the autumn. For the first time this year a declining volume of new buyers registering was witnessed this month ? a normal seasonal trend but one that, according to Hometrack, has arrived a month later than usual.
‘The growth in prices over July may seem at odds with the decline in demand,’ says Richard Donnell, Director of Research at Hometrack. “However, against the background of a limited supply of housing for sale, agents are still reporting continued upward pressure on prices, especially in southern England’.
House price rises across the country also declined in July, says Hometrack. In June agents reported monthly price rises across 42% of the country, whilst in July this fell back to 31%. ‘This is largely a result of continuing affordability pressures in the markets away from southern England which experienced rapid high price growth between 2002 and 2004,’ says Mr Donnell.
The average time that a property is taking to sell and the proportion of the asking price achieved remained unchanged over July according to Hometrack, causing experts to forecast a flattening market for the remaining months of 2006.
‘The prospects for house price growth over the rest of the year are down to the short term direction of interest rates and external factors that impact on market sentiment,’ Mr Donnell explained. ‘If rates were to move higher over the autumn then this would certainly have an impact on levels of market activity and support the expected slowdown in the scale of growth. Even with no change in interest rates, the upsides for house price growth are limited with affordability pressures set to remain a constraint on price appreciation across large parts of the country.’
However Hometrack still forecasts house prices to be considerably higher by the end of the year: ‘Overall we expect average house prices to rise by 4% over the year,’ Mr Donnell concluded.
Tim Dansie, Partner in Jackson-Stops’ Ipswich office confirmed that the housing market is alive and well in Suffolk. ‘Prices are being achieved so long as they are correct in the first instance,’ said Mr Dansie. ‘Overpriced properties, particularly in secondary locations, are being looked at but not bought.’
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