Interest rate rises are slowing house prices

Recent rises in interest rates are beginning to affect the housing market, according to a report by the Royal Institution of Chartered Surveyors.

The rate of house price growth halved in June, the report says, as higher interest rate rises weakened demand in the housing market.

However, studies by the Halifax and Nationwide both saw house price inflation rise slightly in June.

The monthly survey by RICS was the second in succession to report a slow down in the rate of house price growth.

While RICS said housing demand fell in most regions of the UK, there were some exceptions. For example, Wales saw positive growth in house prices.

Ian Perry, a spokesman for RICS, said: "House prices have finally started to cool significantly for the first time since the mini-boom in the housing market got under way in 2006.

"Interest rate hikes have begun to affect the psychology of the market with potential new buyers starting to think twice before buying a new home."

The RICS report was published a week after interest rates were raised a quarter point, to 5.75%.

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