The Slowdown in the growth of house prices | 11.10.2007

There seem to be property news stories about this virtually every week, and many of them are conflicting. One thing is certain – prices are not growing as fast as they have been in the last year.

There are lots of regional variations in the rate of house price growth. But it’s important to realise that house prices are still growing… it’s the rate of growth that is slowing. That’s a clear distinction. It would be a different situation if house prices were actually falling.

Some experts think we are due for a house price correction in the near future, but the long-term growth will still be there.

HIPs were introduced for four bedroomed homes in August and extended to three bedroomed homes in September. Some people believe they have reduced the number of people speculatively putting their home on the market, just to see what they could get for it. And others believe some people are holding their property back to see if any further changes will happen.

In the long-term, it’s likely that people will get used to HIPs and just treat them as another part of the property buying process. This means any impact they are having on house supply now will probably be short-lived.