Housing market 'running out of steam'

17 November 2003
The housing market appears to be running out of steam as the Christmas period approaches, according to the latest survey.

The property website, Rightmove.co.uk is reporting today that the asking price for property in October fell by 0.1 per cent compared to the large rise in September of 3.3 per cent.

Rightmove argues that the standstill in asking prices has been caused by the usual seasonal slowdown and the interest rate rise by the Bank of England earlier this month. The property website claims that the prospects for further interest rate increases are cooling the market off.

Despite the fall in the monthly rate, the annual rate of house price inflation continues to grow. Annual asking price inflation increased for the third consecutive month to 9.9 per cent, up from 9.8 per cent in the previous month and 9.1 per cent August.

The regional disparities continued in the market place, with the west of the country and London showing increases in asking price. Wales and the West Midlands saw the largest monthly increase with asking prices increasing 4.4 per cent and 1.9 per cent respectively.

Asking prices in the capital increased by 1.1 per cent during October, but they are virtually at the same price they were 12 months ago.

According to Rightmove, demand for property continued to outstrip supply for the sixth consecutive month. However, the Christmas period and fewer prospective buyers means that property prices are not being pushed up.

The property website's survey reflects official figures from the Land Registry last week, which showed that, whilst house prices did increase between July and September 2003 in England and Wales, the rate was not as fast as the previous three month period.

The Government's figures also showed that the volume of sales decreased by 11.44 per cent from 328,184 in the third quarter of 2002 to 290,637 for the same period in 2003.