Money News
House prices turned in their smallest rises in February for nine months, moving ahead at the slowest pace since last May as the Bank of England's January interest rate increase hit mortgage market sentiment.
The Royal Institution of Chartered Surveyors' (RICS) housing market survey shows house prices up for the sixteenth consecutive month in February with 24% more chartered surveyors reporting a rise than a fall in house prices, down from 28% in January.
However, the three interest rate rises since last summer are beginning to weigh heavily on buyer affordability. The number of estate agents and land surveyors reporting falling interest from new buyers has more than trebled to 19% and RICS says new buyer enquiries are likely to weaken further in the coming months as January interest rates takes effect on the market
New instructions to sell property have gone nine months without a rise, the longest stretch in seven years. Households remain under little pressure to sell with the stock of unsold property on surveyors books falling to the lowest level since July 2004.
RICS spokesman, Ian Perry, said, "The interest rate rises have started to worry would-be buyers with many concerned that they will be unable to meet mortgage repayments. Affordability for many will continue to decrease in the coming months as the January rise, and further rises take effect. Bullish market conditions still prevail in the South East, Scotland and Northern Ireland but at the same time that prices have stagnated in the Midlands."
14 March 2007 © Moneyextra.com
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