However, with the exception of central London, average prices continued to rise across all counties in the UK.
Market activity in September has been affected by the quieter ‘holiday season’ but this lowering inflation also reflects the market regaining some stability after clearly unsustainable rates of inflation over the last six months. House prices have risen by 12.7% since the beginning of 2002 and now look set to rise by 16% this year (December on December), according to Hometrack.
Hometrack’s unique Housing Demand Index experienced further narrowing as the number of active buyers (demand) fell by 2.2% while the number of new properties registered (supply) rose by 2%. However, as there is still plenty of excess demand in the market Hometrack expects further price rises across most parts of the country.
John Wriglesworth, hometrack’s housing economist, commented: “The housing market is slowing down to more sustainable rates of inflation. Despite the slowdown being partly seasonal we do not expect house price rises to return to the heady rise recorded earlier this year. However, record low mortgage rates, rising incomes and restricted supply point to more house price rises to come, albeit at a more modest rate. We are now predicting 16% price rises for this year (December on December) and 8% for 2003 - still a booming market in comparison with current retail inflation rates. I am confident that there will be no nineties style housing market recession.”
