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Latest data from property website, Rightmove, shows the average property asking price nationally rose by just 0.3% in July - the lowest monthly rise this year. And giving an annual rate of 10.3% (13.2% in June). The average asking price now stands at £240,001 (£239,317).
This year's third interest rate rise has coincided with the lowest monthly asking price increase recorded so far in 2007. The last time growth was this low was December 2006, with -0.3% and September 2006, with a 0.2% increase.
Average national asking prices rose by just 0.3% (£684) as sellers flattened their price expectations. Indeed, the cumulative effect of the rising interest rate environment has seen prices over the last three months rise at a quarter of the pace set in the preceding three months. Between January and April asking prices rose by 6.1%, from £222,859 to £236,490. Between April and July they rose by only a further 1.5%, to £240,001.
Miles Shipside, Commercial Director of Rightmove said: This is further evidence that the 'mini boom' is coming to an end. As long as employment remains buoyant, prices are likely to remain broadly at these levels.
"However, depending on local supply and demand, sellers are going to have to duck and weave with their asking prices, especially if there is another rise in interest rates. This may be less likely now as there do seem to be further indicators suggesting a softening in the housing market as referred to in the MPC's latest minutes."
Instead of the traditional North-South divide, we now have a divide between London and the rest of the country. While the London market continues to show signs of cooling, the annual rate of increase is virtually double all other regions of the country.
The closest contender to London's 21.7% annual increase is the Yorkshire and Humberside region, where prices have risen by 11.4%. Even the capital's neighbours in the South East and East Anglia have a rate less than half that of London, at 10% and 10.4% respectively.
Shipside adds: "Shortages of supply will remain more acute in the capital, as suitable building land is harder to come by and demand will continue to grow as the City strives to become the financial capital of the world.
"The consequent upwards pressure on prices can be absorbed by highly paid City workers, but it exacerbates the existing problems for key workers and first time buyers in London."
23 July 2007 © Moneyextra.com
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