Property prices continued to rise over the course of last month despite reports that the market is stablising, it has been revealed.
In the latest Financial Times (FT) Index, produced by Acadametrics, the cost of homes increased by some 0.3 per cent during July to end the month at an average of 223,035 pounds. As a result, year-on-year house price growth was reported to have fallen by 0.1 percentage points to currently stand at nine per cent. Being the fifth consecutive month that annual rises have stayed between the 8.9 and 9.1 per cent range, Peter Williams, chairman of the firm, claimed that the sector is becoming evermore stable.
He suggested that such steadying was partially due to the property sector continuing to feel the effect of recent base rate rises from the Bank of England's monetary policy committee. Mr Williams commented: "The expectation of a slowing market as the year goes on remains given that the effect of successive interest rate increases continues to work its way through the system. The Bank's recent decision to hold on rates was welcome not least given the newly advised increased incidence of arrears and possessions and the continued uncertainty created by the difficulties in the US sub-prime market".
Over the duration of July, the capital was reported to be driving the surge in prices witnessed across England and Wales, with house values in the Greater London area revealed as rising by 15.2 per cent. Yet when the capital was taken out of the study, the national year-on-year growth was indicated as decreasing to 7.3 per cent. The findings also showed that a shortfall in residential property within the City had caused prices to surge by 38.1 per cent since 2006, with the north London borough of Islington thought in part to have seen increases of 24.7 per cent due to its closeness to the financial district.
However, there were some areas of the capital with increases more in tune with national statistics as Croydon and Barking & Dagenham posted hikes of 7.6 and 6.2 per cent each. Meanwhile, the south-west and south-east respectively have seen increases of 10.1 and 8.6 per cent due to a lack of housing supply pushing buyers away from London. On the other end of the scale, the north of England and West Midlands have posted the lowest rises in the last 12 months, as both increased by 4.2 per cent. According to the FT, the east Midlands witnessed an annual rise of just 5.6 per cent.
In related news, the Council of Mortgage Lenders (CML) reported earlier this year that a rising number of prospective first-time buyers and existing homeowners alike were looking to take out a fixed-rate deal. In a bid to keep their secured loans repayments consistent, the CML revealed that an estimated 89 and 73 per cent of these consumers respectively opted for such a product over the course of May. However, the council reported that borrowers are still set to face pressure placed upon their personal finances as potential property purchases look to take out a mortgage at a record multiple to their annual income.
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