House price register biggest dip in two years: Rightmove |
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Published
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Mon, 21 Aug 2006 11:00
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LONDON - The mini boom in house prices seems to have cooled down, with prices falling by their biggest level in two years this month, according to a new survey by Rightmove. Britain's biggest property website said that the average asking price for a house fell 1.6 percent to £214,040 in August.
“Prices have passed their peak for 2006. The gap between house prices in London and the rest of the UK has started getting narrower,” said Rightmove's commercial director Miles Shipside. The fall in the house prices was attributed to the Bank of England raising the interest rates by a quarter point to 4.75 percent. House prices dropped drastically as the revival in the south east of England petered out. The fall brought the yearly rate of house price inflation to 9 percent.
The survey in August is in sharp contrast to the 2.9 percent rise in July. Rightmove said that the house prices would now be flat for the year since the Bank of England may again raise the interest rates. "The record price levels seen so far this year were driven by the south of the country. With that market cooling, and the signals from the Bank of England that interest rates may move up again, sellers may have to reduce their price expectations," said Shipside.
He also cautioned that the housing market did not need the intervention of the Bank of England at this moment. "It's a careful balance, but with more realism from sellers, we could be entering a period of stability again," he said. "Activity in the property market virtually stopped dead after two successive rate rises in 2004 and took a year to recover. Prices are now cooling off and require no further intervention from the Bank.”
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Asking price of homes in Britain goes up by 0.1 per cent 