Brakes Put On Property Price Growth

House price growth continued to slow during the last month, according to new figures.

Research by Halifax shows that during the month of July, property prices increased by 0.7 percent. As a result, said fourth month in a row in which home values increase by less than one percent. With the average house now costs £ 198,915 was reported, house prices rose by only 1.3 percent during the last three months. Overall, financial services firms reveals that a typical house has increased 11.2 percent in value during the last 12 months - the highest year-on-year increase recorded since February 2005.

Commenting on the figures, Martin Ellis, chief economist for Halifax, said: "We hope the downward trend in house price growth to continue as the five interest rate rises since last summer have an increasing impact of household spending and housing demand. Sound economic fundamentals , high level and labor shortages in the number of available properties available for sale, particularly in London and the south-east, will, however continue to support house prices. "

Mr Ellis added that financial service providers have revised estimates of the total house price growth during 2007 from six percent to four percent. However, he said that this is more due to the strong influence of which is expected to increase during the first four months of the year than the growth seen slowing in recent years.

Although final statistics show curb property price rises, he claimed that consumers could still see the deepening financial pressure on them. "Increasing mortgage rates since last summer have an effect on housing affordability and will bite further during the coming months. Negative real earnings growth so far this year and rising food prices will also reduce household income available for housing," said economist says .

Meanwhile, those who come to the final consumer of their fixed rate mortgage deal for the homeowners facing increased loan repayments. For those who took a two-year fixed product at 5.08 per cent in 2005, financial services companies claim that their monthly loan costs will rise 65 pounds when their contract expired. However, "the majority" is said to be able to absorb these cost increases caused by wage growth and increased equity in the house during the last two years.

Pointing to research from the Bank of England and the Royal Institution of Chartered Surveyors, Halifax shows that the first time buyers an interest rate buy down for the seventh consecutive month during June. Meanwhile, the proportion of credit agreement to finance the purchase of property recorded in the second quarter of 2007 said some eight percent below last four months period of 2006.

Last month, a study by Hometrack showed that house prices on average rose by 0.1 percent during July - the lowest increase recorded during a year-and-a-half. The third consecutive month that showed slowing growth, the company revealed that the typical home now costs £ 176,300.