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Asking prices for UK homes slump in August

London, August 18, 2014

Asking prices for houses in Britain have fallen at the sharpest pace on record for the month of August, led by a drop in London, as the market gets ready for higher interest rates, a survey showed on Monday.

Prices of property coming onto the market fell by 2.9 percent from July, leading to a slowing in the annual rate of price growth to 5.3 percent in August from 6.5 percent a month earlier, property website Rightmove said.

Asking prices in London fell for a third month, dropping nearly 6 percent between July and August, much more than the typical fall in what is usually the quietest month of the summer for the housing market.

The decline adds to other signs of a slowing in Britain's fast-recovering real estate market.

"A drop in August is typical but it's steeper than expected this year," Rightmove director Miles Shipside said.

A 20 percent surge in properties coming onto the market in London, compared with August last year, helped explain the national fall, he said in a statement.

Stricter rules on mortgage lending and expectations of interest rates rising from their record low were also factors.

Shipside said the news would be a relief for the Bank of England which has described the housing market as the biggest domestic risk to Britain's economic recovery.

"There are signs the market is effecting its own natural slowdown without (an interest) rate rise, though underpinned by greater awareness among the public that the five-year holiday of record low interest rates is coming to an end," he said. – Reuters




Tags: Britain | prices |

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