Analysts predict housing market has peaked
September 13, 2007
A number of analysts across the UK are predicting
that the housing market may have peaked, with the number of people looking to purchase their first home in July falling at the fastest rate for three years.
The last time new buyer enquiries fell at this rate was in August 2004, and some analysts state that riding property prices and rising interest rates has resulted in the peal of the housing market, as many first time buyers realize that affordability is no longer within their reach.
The number of unsold properties rose to its highest in eight months in July according to the Royal Institute of Chartered Surveyors. Officials state that the series of five interest rates rises of 0.25% each, along with the possibility of further interest rate rises, has led to a slump in the level of new buyer enquiries, and with interest rates currently at their highest in over six years many new buyers have realized that even if they can raise the mortgage for a property they will struggle to meet the repayments.
One official from the Royal Institute of Chartered Surveyors stated: ‘The combination of softening demand and supply is causing market conditions to weaken further. Buyer activity has pulled back a little over fears that we may have seen the top of the market. With interest rates perched at 5.75% and a jump to 6% a strong possibility, aspiring first-time-buyers are continuing to rent until the market trend becomes clearer.’
Many prospective first time buyers appear to have decided to rent a property for a while whilst they wait and see what happens with the housing market and with interest rates before making any commitment according to experts.
Alan Wright
13th September 2007
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