UK Housing Market Cooling In Response To Interest Rates

The price of homes across England and Wales have grown at are slower pace through the month of July according to official figures released today.

In figures released by the Land Registry, house price inflation was shown to have come in at by 0.1% over the last month, taking the year on July house price inflation down to 8.8%.

However, many have criticised the figures as averages which are not representative of some regions in the UK where house price growth is continuing at a rapid rate.

In London, property prices have risen by 15.5% over the course of the year on July, reflecting much strong price inflation than shown by today’s report.

Additionally, the report fails to take into consideration property prices throughout other parts of the UK, which would be required in order to form a more rounded judgement of their meaning.

Nevertheless, the findings indicate that by and large the economy and inflation are cooling in response to recent interest rate policy changes at the Bank of England, which have seen rates come to 5.75%, with many analysts forecasting a rise to 6% should inflation continue to be an issue.

The Bank of England have risen interest rates 5 times in the space of a year to bring inflation under control within its 2% target, lifting the price of a variable mortgage and dampening consumer spending.

According to figures released over the last month, and indeed today’s findings, the economy seems to be responding swiftly to the change in interest rates, which were designed to take the shine off the long-standing economic boom.

Meanwhile, in separate figures released this month, the Royal Institution of Chartered Surveyors noted that first-time buyer numbers were down at a three-year low, numerically, reflecting the overall impact of the cooling of interest rates and the economy overall.

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