Price inflation hits first time buyers in July

10-Sep-2007

First time buyers saw price inflation increase again in July, figures from the Department for Communities and Local Government (DCLG) have shown, but the Royal Institution of Chartered Surveyors (Rics) has suggested that this is not the full story.

The DCLG has reported that annual price inflation rose to 12.4 per cent in July, up from 12.1 per cent in June, with price inflation for the three months to July standing at 11.8 per cent.

Rics, however, has said that such figures could soon change as lenders become less willing to give out easy credit to borrowers in light of the problems experienced in the US this summer.

"The latest data from the DCLG suggests that the housing market is continuing to power ahead. These figures, however, relate to July and do not begin to reflect the more recent turmoil in financial markets," commented Rics chief economist Simon Rubinsohn.

"We would expect house price inflation to slow sharply over the coming months as access to mortgage finance is disrupted particularly for higher risk borrowers," Mr Rubinsohn added.

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