June 18, 2007 / 12:09 PM / 13 years ago

House prices rise modestly in June

LONDON (Reuters) - Asking prices for homes in England and Wales picked up modestly from mid-May to mid-June but property inflation held below peaks scaled earlier this year, a survey showed on Monday.

File picture shows house sale signs. Asking prices for homes in England and Wales picked up modestly from mid-May to mid-June but property inflation held below peaks scaled earlier this year, a survey showed on Monday. REUTERS/file

Property web site Rightmove said prices rose an annual 13.2 percent during the month. This compares with the previous month’s 13.1 percent rise and four-year highs of 15 percent in late March/early April.

House prices in London rose more slowly than the national average for the first time this year, up by 0.7 percent month on month compared with 0.8 percent for the country as a whole.

More than half of London boroughs showed a fall in prices on the month and annual inflation in the capital slowed to 23.1 percent from 24.8 percent.

A sharp rise in the number of new properties coming on the market helped to keep a lid on property inflation.

Rightmove said estate agents recorded an average 10 percent rise in stock — the largest in three years — as sellers rushed to avoid the introduction of home seller information packs.

These packs, which would have obliged sellers to spend money on having their houses surveyed for environmental and other factors, were originally scheduled for June 1 but were postponed by the government.

“More property available is good news for buyers, as sellers that need to sell urgently will have to drop their price,” said Miles Shipside, Rightmove’s commercial director.

“Ironically those that sought to save a few hundred pounds by avoiding the home information packs have contributed to a glut of property on the market which will actually cost them money as they have to discount their prices to sell.”

Rightmove’s survey tallies with other indicators showing the housing market is starting to come off the boil as higher interest rate rises take their toll.

The Bank of England has raised borrowing costs four times in the past year to 5.5 percent, the highest in the Group of Seven industrialised countries. The market expect rates to hit 6 percent before the end of the year.

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