Signs of seasonal cooling in housing market
A new report shows signs of a dampening of activity in the housing market, partly due to tighter lending conditions and the release of pent-up demand.Rightmove's July house price index reveals the price of property coming to market has fallen for the first time this year, dropping by 0.8 per cent during the month and taking the annual rate of growth from 7.7 per cent to 6.5 per cent.However, the property website has warned the significance of the fall should not be overstated, as this trend has been witnessed for the past ten years and the drop party reflects a seasonal slowdown.Indeed, despite the lull, Rightmove has revised its annual growth forecast to eight per cent - at the top end of the range initially predicted in December last year.Mortgage approvals are running high, despite the Bank of England's attempts to cool the housing market. They are up 23 per cent in the year to date compared with the same period in 2013, occurring at an average of 60,000 a month.According to Rightmove, the government's Help to Buy programme is helping to unlock the middle market, with research revealing third-time buyers are the largest group looking to move in the next 12 months.The property website says this will create knock-on activity in the wider economy and lead to the more efficient use of the UK's housing stock.Rightmove director and housing market analyst Miles Shipside said: "The unleashing of this more affluent group, plus good supporting acts from first-time and second-time buyers, will mean that the musical chairs of trading up and down will continue in the second half of the year having been kick-started by Help to Buy in the first half."Upward price pressure is continuing in areas of the country where the supply of property coming to market remains tight or the properties on the market are not of the quality buyers are looking for. Supply is particularly constrained in the south-east, although there has been a 15 per cent rise in the number of properties coming to market in London.
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