(1888PressRelease)
May 22, 2007 - While the Halifax House Price Index reveals all UK towns included in the survey have average house prices in excess of £100,000 for the first time, Martin Ellis, Halifax's chief economist, believes recent interest rate rises are starting to impact on house price growth.
"House prices continue to rise in a tight market but there are emerging signs that pressure on householders' finances, partly due to the rise in interest rates since last August, is dampening housing demand," Mr Ellis said.
"Overall, house prices increased by 2.8 per cent in [the first three months of] 2007, well below the 4.2 per cent rise in [the last quarter of] 2006. There is also evidence of reduced market activity."
"We expect the higher level of interest rates, negative real earnings growth and above inflation council tax bill increases to lead to slower house price growth over the coming months."
It is expected that interest rates will be further raised by the Bank of England's monetary policy committee in its next meeting, scheduled for early May.
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