Homebuyers consider rate rises

21 September 2004
Britain's property market appears destined for a slowdown, according to the Royal Institution of Chartered Surveyors.

RICS says buyer inquiries in August were down for the fourth month in a row, with estate agents discerning signs that the bitter pill of higher interest rates was starting to take effect.

RICS' survey of seasonally adjusted house prices balance dropped to -12 in August from +3 in July.

Estate agents noted price falls in the market with buyers wary of more borrowing given concern that the Bank of England may increase the cost of borrowing later in the year.

RICS downplayed suggestions Britain was heading for a property crash akin to the one witnessed in the 1980s, as the UK was buoyed by a robust, low unemployment economy.

"The market slowed across all regions, with London, the south-east and eastern regions reporting the largest price falls followed by the south-west," RICS noted.

"The strongest price growth by far remained in Scotland and the north but a rapid slowdown was apparent in the north-west and Yorkshire and Humberside. Prices were static in the Midlands and Wales."

On Monday, the Council of Mortgage Lenders said the number of loans for house purchases fell by a fifth in August to 104,000, down from 130,000 in July.

Figures from property website Rightmove also out on Monday showed house prices were "static" between August and September.

The average price of a home in England and Wales stood at £192,316, following the two per cent drop off over the previous five weeks.
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