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Supply 'tumbles' as market tightens
The latest housing market figures from team Association show the market tightening as a result of the five interest rate rises over the last year...
On a national level, house prices in July stood at £222,633 which is a 0.8% increase from July’s figures last year. This minimal increase gives a clear indication of the slowing house price inflation trend following the stifling interest rate rises.
Regionally, the house price results were very similar to national figures with, in most instances, minimal price increases for all regions between July 2006 and July 2007. It has been reported that:
- East Anglia prices rose by 0.09% from £185,350 to £185,526.
- Essex prices increased by 0.3% from £200,986 to £201,760.
- Greater London prices rose by 2% from £325,125 to £332,683.
- South East prices increased by 2% from £248,626 to £250,297.
- South West prices rose by 0.9% from £215,371 to £217,389.
- Wales’s prices grew by 0.2% from £169,979 to £170,391.
- West Midlands increased by 0.7% from £197,941 to £199,316.
Greater London and the South East have seen the greatest price increase indicating that the area has not been as badly affected by the rate rises. With demand significantly outstripping supply in the regions, house prices have been able to maintain a stronger upward trend.
Property supply takes a tumble
Agents this month have also reported that property supply has taken a tumble by 22% from last month. Comparing this figure with the property supply figures of July 2006, national property supply has decreased by 7%.
This drop can be partly attributed to the July interest rate rise combined with uncertainty over the movement of rates in the future. The summer holiday period is also a major contributing factor to the decrease in supply.
The number of properties sold in July has also decreased. When comparing the national average from July 2006 to July 2007, supply has dropped by 22%. Again this may be due to the reluctance of home owners wanting to sell their property and move up the property ladder due to the impact of interest rates on household spending.
Pressure hits home
Alan Kirkman, Director of Communications at team, comments: “It is clear to see that the pressure of the past interest rate rises has stifled the housing market. House hunters are visibly feeling the pinch on their purses and are looking to stay in their current homes or indeed avoid stepping onto the property ladder for the time being due to the current economic conditions.
“However, recent reports have indicated that a further interest rate may now be delayed, which is encouraging news for both the housing market and house hunters. Once the holiday season has finished, the market will hopefully show signs of levelling out.”
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