Monday, 12 November 2007
UK House price Falling...Finland Next?
In October, house prices were 8.9 per cent higher than a year earlier, a fall in the inflation rate from 9.2 per cent in September and a high of 10.1 per cent in June. The annualised rate of growth over the past three months is even lower at 6.1 per cent, suggesting house price inflation will continue on a downward path.
The question that few are willing to forecast with any certainty is how far and how quickly the market will slow. “What we are witnessing is a market in transition - albeit at this stage it is hard to predict where it might settle,” Mr Williams added.
The slowdown in demand appears to have multiple causes. First-time buyers have increasingly been priced out of the market, both by rising house prices and higher interest rates. Investors seeking a buy-to-let property have become more cautious as the market peaked. And those with patchy credit histories can expect to have much more difficulty in finding a low-cost mortgage as lenders have sharply increased the cost of their subprime mortgages.