View more on these topics

Confidence in property prices low, says

Forecast annual UK house price growth is at its lowest level this year, the most recent research by reveals.

It also found the extent to which people expect house prices to rise fell in June to just below 5%, down from over 6% in May.

The main cause for the shift in peoples expectations is the May rate rise, as well as the well publicised probability of a further hike to 6% before the end of the year, with 88% of people stating that a further cooling of the market would be primarily due to rate hikes.

Warren Bright, chief executive of, says: The housing market is undoubtedly slowing.

The May rate rise has had an immediate impact on homebuyer confidence and fears of more to come are dampening expectations for house prices.

We would expect future price growth to moderate in line with current confidence levels.

Mervyn King has now made clear that higher rates are almost certainly on the way.

The Monetary Policy Committee directly affects what happens to variable rate mortgages but recent developments in the bond markets make it much more likely that longer term fixed rates are going to rise as well.

Home buyers may be wise to lock in sooner rather than later.

People in Scotland and Northern Ireland are far more optimistic about future house price growth than people in England where the majority of regions expect a slower rate of growth in months to come.

People in London and the South East are the exception and still expect a growth rate above the national average.

Bright adds: Whilst most of the country is in slow down mode, a few regions continue to power ahead due to localised market influences.

Whilst most areas are conscious of the impact of rising borrowing costs, people in London and the South East remain confident that the market in these regions will continue to benefit from the wealth and success of the City.

Scotland and Northern Ireland remain optimistic due to the exceptional growth they have experienced lately.

They have been playing catch up in terms of house prices, particularly Northern Ireland, where until recently political turmoil had held the market back.

However, it is surprising given recent growth rates that people in Scotland and Ireland are not even more positive in their outlook.

Rates are biting but the picture is certainly not doom and gloom.

People do not expect house prices to fall – they simply expect growth to slow.

Prices have grown over 9% in the past year, with some areas notably London, Scotland and Northern Ireland – by even more.

This rate of inflation is not sustainable.

The research shows that price growth is expected to continue across the UK but at a more subdued rate, with people citing continued activity from investors and too few new homes being built as the primary reasons for the market to continue to grow.

Bright adds: The market is finding a new level but it remains strong and there is no sign of long term supply constraints easing any time soon.

However, there are potential disruptions on the horizon.

On top of another rate rise, the ongoing farce of HIPs is likely to cause further confusion in the market.


Trigold’s product list is five days out of date

I’ve been arranging mortgages for 35 years and have used Trigold for over 10 years. But I was recently informed by a member of staff in its product department that Trigold’s product list is five days out of date. I discovered this for myself after sourcing a mortgage with Nottingham on a five-year fixed rate […]

MI online service offers ARs customised websites

Mortgage Intelligence has launched an online service that gives its app-ointed representatives the chance to have customised websites.Each website will be custom-built to members’ branding specifications and will include a jargon buster, a mortgage calculator and contact forms for clients to leave their details.Sally Laker, managing director of MI, says: “Today it is essential for […]

Builders to bid for eco-village pilot

House builders are set to bid for the right to build the first of five prototype eco-villages ahead of Gordon Brown’s plans for five zero-carbon towns.Contractors have been given a pre-qualification questionnaire by English Partnerships to build 150 homes in Hanham Hall, Bristol, on a 6.1 hectare former hospital site deemed ripe for redevelopment.The questionnaire […]

FSA has its beady eye on DA firms

The regulators keep tabs on directly authorised firms in many subtle ways so this should not be seen as a soft option compared with appointed representative status, says Bill Warren


News and expert analysis straight to your inbox

Sign up