The UK property boom seems to have reached its peak as house price rises in June slowed for the third month in a row, according to a survey by Hometrack.
Latest figures from the property research and database company suggest house prices rose by just 0.4% in June, compared with last month's 0.6% increase.
Price increases have cooled since February this year as demand has fallen relative to supply, with the number of new buyers coming onto the market dropping by 0.6%.
Other signs also suggest the over-inflated market may have come to a halt, Hometrack says.
Average sales prices achieved as a percentage of asking prices have dropped, sending the sales price ratio to 96.2% in June, down from 96.4% in May.
Regionally, house prices continue to increase throughout the whole country except in Oxfordshire, which experienced a 0.7% fall.
John Wriglesworth, Hometrack’s housing economist, says: "While house prices are continuing to rise, there are the first signs that the market may be easing. New buyers have reduced and excess demand has fallen for the first time this year. With the effects of the recent interest rate rise still to feed through, it looks like the market will continue to slow this year."
That said, he does not believe there will be a coming market crash. He says: "Interest rates still remain historically low, unemployment remains at a record low and incomes are rising strongly. Meanwhile lenders continue to compete vigorously for new business with exceptionally attractive mortgage offers.
"All the signs suggest that we are heading for a soft landing after the heavy price rises of recent years," he predicts.
"However, we are maintaining our forecast of 8% house price rises for 2004, with a further slowdown to 4% in 2005," he concludes.IFAonline
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