This is a 1.08 per cent increase on the annual growth up to June (6.32 per cent) and a 3.08 per cent increase since the beginning of the year (4.32 per cent).
Future growth
House prices will remain on an upward curve as a result of the general imbalance between supply and demand and an overall lack of available property on the market. Assetz stands by its original prediction of 5 – 7 per cent growth by the end of 2006, followed by an average of 5 per cent growth per annum for the next three years.
Interest rates
The full effect of August’s interest rate rise will become clear in the September and October figures, but it is expected to pre-empt a slowdown in the current rate of growth of around 2 per cent heading into the autumn months. With a second interest rate rise expected by the beginning of 2007, homeowners and first-time buyers in particular will be feeling less confident, with affordability remaining stretched. Already buy-to-let investors are looking into the possibility of raising rents and it is likely the interest rate rise will be passed on over time to tenants.
Average house prices
The average house price, taken from the average price provided by all the six indices, is £191,493, up from £189,581 in June. This shows an increase of almost £2,000 (£1,912) in July alone and an increase of £11,949 on the price of a new home in the twelve months since July 2005, when the average property price was £179,544.
Stuart Law, managing director of Assetz, commented: “The housing market has performed even better then expected this summer, resulting in the average homeowner pocketing almost £2,000 in July alone. With Rightmove figures showing a jump in asking price of almost £6,000 last month, it is clear that people are confident of achieving a fast sale at a healthy price.
“However, with the threat of another interest rate hike hanging over homeowners, the rate of growth is likely to ease up heading into the autumn months, back to a more realistic 5 – 5.5 per cent.”
