House price inflation slows in April

| May 10, 2007 | 0 Comments
House price inflation slows in April

In its most recent monthly survey, the Halifax (LSE: HBOS) says that house price inflation was up by only 1.1 percent in April, the smallest increase this year. That took annual house price growth down to 10.9 percent after being at 11.1 percent in March. The average price of a house in the UK now stands at £196,745. The lender believes that price growth will slow soon considering that interest rates have gone up several times in recent months and were hiked again today, to 5.5 percent, by the Bank of England’s Monetary Policy Committee.

With today’s hike, the cost to borrow on a standard variable rate mortgage has gone up by 22 percent in the past nine months. On a £100,000 repayment mortgage, that amounts to an extra £60 per month. Halifax cites recent declines in mortgage approvals and drops in inquiries from potential buyers as evidence that the housing market is beginning to cool. Mortgage lenders are worried that the market could slow considerably under the dual hardships of higher interest rates and the new requirement, set to begin 1 June, that all sellers of houses prepare a Home Information Pack.

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