First time buyer enquiries down in July

29-Aug-2007

The number of new enquiries made on homes has fallen for the eighth month in a row, the Royal Institution of Chartered Surveyors (Rics) has said, as first time buyers face increasing problems in trying to get onto the property ladder.

The latest house price index from the Land Registry has shown that prices rose by just 0.1 per cent in July, down from 0.5 per cent in June, indicating the extent to which demand is dampening.

An average home now costs £181,460, according to the study, though this can vary wildly, with prices in London continuing to rise at a faster rate than in the rest of the country.

But the fact that the number of properties sold in the capital worth £1 million or more increased by eight per cent between May 2006 and May 2007 suggests that this is the work of seasoned investors rather than first time buyers.

"The housing slowdown continues to accelerate as homeowners and prospective buyers deal with the impact of five interest rate increases since last August, and the most stretched affordability conditions for more than 15 years," commented the Royal Institution of Chartered Surveyors' senior economist David Stubbs.

"A difficult 2008 looms for the housing market, and will be made even worse if interest rates rise to six per cent in the coming months," Mr Stubbs added.

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