Price growth falls on the back of first time buyer shortfall

05-Sep-2007

House price growth eased off in August as the number of first time buyers keen to enter the housing market fell for the eighth consecutive month, Halifax has advised.

The lender's monthly house price index found that price growth fell slightly, down to 0.4 per cent from 0.8 per cent in July (a revised figure), with a slight reduction in demand likely to be at least partially responsible.

Mortgage approvals were down by nine per cent in the three months to July when compared with the recent peak seen from September to November last year, the study added.

"Whilst the market remains robust, [the figures] provide further evidence that house price inflation has slowed since the beginning of the year," commented Martin Ellis, chief economist at Halifax.

"Sound economic fundamentals, high levels of employment and a shortage in the number of properties available for sale will, however, continue to support house prices," Mr Ellis continued.

However, earlier this week Haart estate agents suggested that first time buyer numbers were likely to pick up again as the year progresses due to an increasingly widespread belief that interest rates have now peaked.

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