lettings appletons on 28 Sep 2007 12:15 pm
House prices unaffected by recent financial concerns
According to the Nationwide Building Society, the recent financial concerns (especially the Northern Rock problems) have not affected the UK housing market in September and the prices are still rising in the month.
As expectedly, though, the sub-prime (or riskier) mortgages have become more constantly to the borrower.
The prices rose by 0.7% in September but more importantly the house price inflation has slowed down to 9% from 9.6%. This is almost the lowest level over the last 12 months. The Building Society suggests that this slow down is mainly due to the base interest rate increases by the Bank of England.
Different surveys from different sources indicate conflicting conclusions, though. For example, Halifax claim that the house prices are still on the increase whereas other sources, such as, the Royal Institution of Chartered Surveyors are now more certain that the long awaited slowdown in house prices has already started this summer.
Slowing property demand
Earlier this week, Barratt, one of the biggest house building companies in England, published up to a 10% fall in its property sales over a week following on from the Northern Rock difficulties.
Good news for the borrowers?
Many market analysts are now forecasting that the Bank of England will start cutting the base rates before the end of the year in order to help the economy. This should certainly help the existing borrowers. But one thing seems certain that the high risk borrowing cost is not going to get much cheaper for a foreseeable future.
