House Price Rises ‘Slow Sharply’

Tuesday, July 20 2004

Average house price inflation has ‘slowed sharply’ in June to the slowest pace in ten months, according to the latest survey from the Royal Institute of Chartered Surveyors (RICS). The survey showed that the two consecutive interest rate rises in May and June, as well as the Bank of England?s warnings of an imminent crash, have successfully slowed the market down.

According to the survey, for the three months to June, 17% more surveyors reported a rise in house prices than a fall, compared to 43% in May and a long-run average of 24%. The survey has also shown that while buyer activity has declined slightly, seller activity has picked up, possibly in reaction to concerns over falls in prices. However tight market conditions remain.

RICS pointed out that, due to the positive economic climate and continuing growth in employment, a crash should be avoided. RICS housing spokesman Ian Perry said: ?The housing market seems to be mirroring the wider economy ? it may become less of a cycle of booms and busts and more a case of gentle rises and falls. The positive economic climate and growth in employment will provide a soft landing for future house price fluctuations.?