House prices show market finally cooling

House prices have started to cool down
HOUSE prices rose by just 0.1 per cent in August, according to the Halifax index, showing that the UK’s fast-moving property market is finally slowing down.

The small increase took the average price to £186,270, with prices in the three months to August three per cent higher than the previous quarter and 9.7 per cent higher than in the same three months last year.

Halifax economist Martin Ellis said: “Housing demand is supported by continuing economic recovery, growth in employment, improving consumer confidence and low mortgage rates. Nonetheless, earnings growth that remains below consumer price inflation, and the prospect of an interest rate rise at some point over the coming months, are likely to curb demand.

“There are some signs of an improvement in housing supply, both in terms of more second-hand properties coming onto the market and increased numbers of new homes. These trends, if sustained, should help to improve the balance between supply and demand, contributing to an easing in the pace of house price growth.”

Howard Archer, of IHS Global Insight, said the price increase, which followed a 1.2 per cent lift in July and 0.4 per cent dip in June, backed his view that prices would keep rising, but at a slower rate.

“We expect house prices to increase by around 1.5-2 per cent over the final four months of 2014.”

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