First time buyers 'experiencing market turnaround'

27-Jul-2007

The housing market continued to turnaround in July as lower demand forced more first time buyers out of the market, new figures from Hometrack suggest.

The property research firm's monthly survey mirrors that published by Nationwide earlier this week, with both studies reporting house price growth of just 0.1 per cent this month.

However, unlike the Nationwide research, the Hometrack figures represent the third consecutive month of reduced price growth, down from 0.3 per cent in June and 0.6 per cent in May.

It was inevitable that the steady increase in interest rates which began last year would ultimately impact on levels of housing demand right across the market - a trend that has been exacerbated by the seasonal slowdown in activity over the summer."

While the growth in supply across the country appears to have moderated, we expect demand to remain weak over the second half of the year as the impact of higher interest rates continue to feed into the market."

The Bank of England's Monetary Policy Committee is due to meet next Thursday to make their latest interest rate decision but it is thought that a rise to six per cent is unlikely to materialise just yet.

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