September 5, 2007 / 7:12 AM / in 13 years

House price growth slips

House prices rose a brisk 0.4 percent in August, but the increase was down from July, according to HBOS's Halifax house price survey. REUTERS/File

LONDON (Reuters) - House prices rose a brisk 0.4 percent in August, but the increase was down from July, according to HBOS’s Halifax house price survey.

The August rise took the annual rate of house price inflation to 11.4 percent and the average house price to 199,770 pounds.

The monthly rise in house prices was just half that recorded in July, when prices increased by an upwardly revised 0.8 percent and the annual rate of inflation was 11.2 percent.

Still, the figures suggest the housing market remains in robust shape even after five rises in borrowing costs, and echo other recent strong housing market data such as mortgage approvals and the Nationwide house price survey.

“While the housing market may be losing momentum, it continues to display some discernible degree of resilience in light of both higher borrowing costs and historically tight affordability constraints,” said Richard McGuire, strategist at RBC.

Analysts said they expect the market to come off the boil later this year, but still think there’s room for the Bank of England to raise interest rates one more time to 6.0 percent, albeit not this week.

“Given what we know at the moment, there’s still enough for the Bank to think another hike is warranted,” said Peter Newland, economist at Lehman Brothers.

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