Liquid error: wrong number of arguments (2 for 1) Home buyers put off by high prices, rising rates | Marsh & Parsons Sales and Lettings Estate Agents London

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Home buyers put off by high prices, rising rates

Mon 28 Jul 2014

Rising house prices, the prospect of higher interest rates, and difficulty in raising a deposit are rapidly putting people off buying a house according to Halifax. A survey by the lender identified a sharp drop in the number of people who felt that it would be a good time to buy a house over the next 12 months- to a balance of +5% in the second quarter, from +34% in the first quarter. The trend was most pronounced in the property hotspots of London and the south east. It was the latest sign that elements of the housing market are cooling, following a drop in mortgage approvals and applications, and a recent fall in buyer enquiries in London in recent weeks. Halifax said seven-in-10 people in Britain think house prices will rise over the next year, continuing a trend which saw the annual rate of growth in prices rising to 8.8% in June, according to the lenders own data. While the appetite for buying waned in the second quarter, members of the public were more optimistic about selling property. Of those surveyed, 57% felt it would be a good time to sell over the next 12 months, compared with 32% who felt it would be a bad time. It gave a balance of +25%, up slightly from +24% in the first quarter and the highest since April 2011. Craig McKinlay, mortgages director at Halifax, said: "Over the past two years consumer confidence has continued to grow, however it appears that weve reached a tipping point with the equilibrium between buyers and sellers much more out of sync. "The results highlight the regional variations as now people believe that its a good time to sell but not buy, particularly in London and the south east where house price expectations are generally higher and buyers appear to be less inclined to rush into buying a property as we have seen over the past 12 months". Earlier the official Land Registry data showed London house prices slowed almost to a halt last month. The average price of a home in the capital went up just 0.1%, or 536, in June to 437,608 after surging 10% since the start of the year. Agents said a combination of tougher mortgage rules, fears of a looming interest rate hike and the strength of sterling have all combined to end Londons property "silly season" and halt the once rampant sellers market in its tracks. Peter Rollings, chief executive of west and central London agency Marsh and Parsons said: "After a frenetic start to the year, the pace of house price growth has slowed this quarter s the market stabilised and returns to more normal trading conditions. "With more choice coming onto the market, sellers are able to find their next onward purchase and consider trading up. Calmer conditions in the market have meant buyers view purchasing in London prime property as a less daunting process than has been the case previously." Annual property price inflation in some outer boroughs has slipped into single figures with just 8% recorded in Hounslow and 8.3% in Redbridge. The biggest rise in was in Waltham Forest where prices have soared 28.1% in a year. It is the first time that the Land Registry figures- regarded as the "gold standard" for house price measurement- have shown signs that the market has reached a plateau. Its figures tend to lag several months behind anecdotal evidence in the market because they are based on completion prices lodged with the registry. Prices are still 16.4% higher than they were a year ago, but the annual rate of increase is starting to subside from the 20% levels seen only a few months ago. Alexander Gosling, managing director of online estate agents housesimple.co.uk, said: "Monthly growth of 0.1% is not exactly a slump but the heat does appear to have gone out of the property market." With lenders Mortgage Market Review, rate rises to come and wage growth still proving negligible there is every reason to expect more conservative growth in the months ahead. "I think London buyers in particular have reached a point where enough is enough. Silly season couldnt go on forever."

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