(1888PressRelease)
July 31, 2007 - Northern Rock predicts that we will see a downturn in inflation as the year nears its end and its prediction fits with that made by Rightmove.
The mortgage lender says that customers are being put off from taking out a mortgage by recent base rate increases and points out that increased mortgage values are making up for a decline in applications.
House price growth is also expected to suffer as a result of increased interest rates and the threat of further rate rises.
"We also expect to see house price inflation continue to slow in the second half of 2007 to end the year in line with increases in earnings," the firm told the Times.
Nationwide has recently published its House Price Report for July which shows that house price growth in the month slumped to just 0.1 per cent.
This was down on the 1.1 per cent figure for June and brought annual inflation crashing down from 11.1 per cent to just 9.9 per cent.
Almost all the lenders are now in agreement that house prices are slowing, says National Homebuyers. "Northern Rock are cautious over their wording," says director Julian King.
"The market is already slowing" he says. "Although house price inflation has decreased across most of the UK, we need to be aware that in some areas property prices are falling."
Figures published in the Nationwide House Price Report show that growth slumped to just 0.1 per cent, down from the 1.1 per cent inflation seen in June.
National Homebuyers announced in May that an increase in enquiries to their fast property purchase solutions from areas like Nottingham, York and Belfast meant that prices were due to start falling.
Yesterday Greg Vaughan, partner at Patterson Miller in Belfast said the market is "overheated".
Like much of the UK, Northern Ireland has enjoyed a sustained period of property growth, but now, with a large number of buyers priced out of the market, sellers are finding they need to reassess their asking price
