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Demand from new home buyers drops First-time buyer demand 'drops'
(about 6 hours later)
The number of people looking to buy a house for the first time has fallen at its fastest rate in more than three years, a report says.The number of people looking to buy a house for the first time has fallen at its fastest rate in more than three years, a report says.
Inquires from new buyers plunged in July, while the number of unsold properties rose, The Royal Institution of Chartered Surveyors (RICS) said. Inquiries from new buyers plunged in July, while the number of unsold properties rose, The Royal Institution of Chartered Surveyors (RICS) said.
Higher interest rates, which have hit 5.75%, had weakened demand in the property market, it added.Higher interest rates, which have hit 5.75%, had weakened demand in the property market, it added.
But house prices still rose for the 21st month in a row in July, RICS said.But house prices still rose for the 21st month in a row in July, RICS said.
'Market weakens further''Market weakens further'
Many analysts are expecting rates to rise to 6% by the end of the year, as the Bank of England's Monetary Policy Committee tries to rein in inflation.Many analysts are expecting rates to rise to 6% by the end of the year, as the Bank of England's Monetary Policy Committee tries to rein in inflation.
Aspiring first-time-buyers are continuing to rent until the market trend becomes clearer Jeremy LeafRICSAspiring first-time-buyers are continuing to rent until the market trend becomes clearer Jeremy LeafRICS
Concern over this is thought to be behind the number of first time buyer inquiries dropping at the fastest rate since August 2004.Concern over this is thought to be behind the number of first time buyer inquiries dropping at the fastest rate since August 2004.
"The combination of softening demand and supply is causing market conditions to weaken further," said RICS spokesman Jeremy Leaf said."The combination of softening demand and supply is causing market conditions to weaken further," said RICS spokesman Jeremy Leaf said.
"Buyer activity has pulled back a little over fears that we may have seen the top of the market."Buyer activity has pulled back a little over fears that we may have seen the top of the market.
"With interest rates perched at 5.75% and a jump to 6% a strong possibility, aspiring first-time-buyers are continuing to rent until the market trend becomes clearer.""With interest rates perched at 5.75% and a jump to 6% a strong possibility, aspiring first-time-buyers are continuing to rent until the market trend becomes clearer."
The RICS report comes a day after government figures showed that UK house prices were 12.1% higher in June than a year earlier.The RICS report comes a day after government figures showed that UK house prices were 12.1% higher in June than a year earlier.
The rate of growth was the highest since March 2005, and compares with May's revised figure of 10.8%.The rate of growth was the highest since March 2005, and compares with May's revised figure of 10.8%.
The average UK house price rose from £210,793 in May to £214,222 in June, according to the Department of Communities and Local Government.The average UK house price rose from £210,793 in May to £214,222 in June, according to the Department of Communities and Local Government.