House price growth biggest in 1-1/2 years: Hometrack

House price growth biggest in 1-1/2 years: Hometrack

	Published : Mon, 31 Jul 2006 09:30 By : Cedric Benson Print this Story

LONDON - House prices in the UK continued to be on an upswing in July and grew at the fastest rate in one and half years, but this growth was mainly fuelled by the rise in the London housing market, the latest survey by Hometrack has revealed.

The property consultant said that UK house prices grew by 3.2 percent in July as compared to the growth registered at the same time last year. This growth rate is the fastest since October 2004. The rise was mainly helped by a 7.3 percent increase in the London housing market, Hometrack said. "The growth in prices over July may seem at odds with the decline in demand," said Richard Donnell, a director of research at Hometrack. "However, against the background of a limited supply of housing for sale, agents are still reporting continued upward pressure on prices, especially in southern England."

The house prices grew by 0.6 percent in July and the average price of a home in England and Wales was £166,500. In London house prices grew by 1.1 percent in July. The London prices continue to flatter the property market overall, but there is evidence of a slowdown elsewhere. "Whilst the strength of the market in London continues to flatter the headline results, the July survey provides clear evidence that levels of house price growth and market activity are starting to slow, a trend which is expected to continue over the rest of the summer and into the autumn," Hometrack said in a statement.

Hometrack noted that there was a 0.9 percent dip in the volume of new buyers who registered with agents in the month of July. The survey also said that if the Bank of England raises interest rates as expected, then the property market could further recede. "We expect levels of demand to moderate over the rest of the summer and into the autumn with any increase in interest rates compounding the likely slowdown," Mr Donnell said. "Overall, we expect average house prices to rise by 4% over the year."