House price growth is still climbing, putting the average house price at £199,770, but is set to slow further in coming months according to the latest figures from Halifax. Prices increased by 0.4% in August, according to the lender, making August the third month in which house prices have grown less than 0.5%.
The annual rate did edge higher to 11.4% last month from 11.2% in July, although experts have pointed out that the year-on-year comparison is set to look more sombre in coming months, when set against the strong monthly gains seen last autumn.
Halifax also noted that despite the five consecutive rate rises, a healthy economy and a strong labour market are continuing to underpin housing demand, although the bite on new buyer interest is set to continue.
?The downward trend in house price growth is expected to continue over the remainder of 2007 as the five interest rate rises since last summer have had an increasing impact on household spending and housing demand. Sound economic fundamentals, high levels of employment and a shortage in the number of properties available for sale will, however, continue to support house prices,? predicted Martin Ellis, Halifax Chief Economist.
Ed Stansfield from Capital Economics agreed: ?The outlook is for a slowdown in the annual rate of house price inflation over the next few months,? he said. ?In 2008 we expect prices to be broadly stable at the national level, with rises in some parts of the country being offset by modest falls in others.?