262: Rates rises not dampening demand

Navigation trail: / latestnews / archive / 262 - published: 22-01-07

Property Web site Rightmove has said higher interest rates have not dampened demand for the housing market.

Rightmove said that asking prices rose an annual 13.5% so far in January, picking up from a 13% increase in December. This brings the average asking price rose to a record 222,859 pounds. (between December 3 and January 13th)

House prices rose 0.5% during this time compared with a 0.3% dip in the December survey, although the figures are not adjusted to take account of seasonal factors.

Increased demand from first-time buyers and a shortage of new homes on the market drove prices higher, Rightmove added, with property stock levels per estate agent at their lowest for three years.

Asking prices in London rose 22.4% on the year and were 18.3% higher in south west England, while prices in Wales were 7.2% stronger.

Miles Shipside, Rightmove commercial director said: "The reason house prices are defying the gravity of a six year high in interest rates is because the number of new households is growing by 50,000 a year, more than the supply of new build.

Where there are shortages of property, prices will keep increasing and properties will keep selling, in spite of the latest interest rate rise. The two interest rate rises late last year did not choke demand in the housing market.

Property prices will continue their upward trend, and fuel long term inflationary pressures, until we see the fruits of positive Government action to improve the supply, and consequently the affordability, of housing," Shipside added.

Source:

Citywire.co.uk