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20th June 2014

The media has been inundated with news of house prices slowing down recently, with research from plenty of sources citing some of the possible reasons why this is happening. Rightmove, RICS and Nationwide are amongst the companies that have conducted the research and they have all found similar findings

A brief overview of the findings are below:

Rightmove have reported that in London, asking prices for properties for sale have dropped by 0.5% last month, compared to the first 5 months of 2014 where the increase was much more substantial. The report further states that there had been an increase in sellers on the market, but with the implementation of stricter mortgage lending criertia introduced by the Mortgage Market Review (MMR), buyers have become more reluctant to purchase.

A report by the Royal Institute of Chartered Surveyors claims that the slowdown in the market is due to a lack of choice of properties for buyers. The possibility of rising interest rates also is a deterrent to those who were initially interested in buying a home. They also reported that there has been a decrease in the demand for local properties for the first time since June 2013.

Nationwide’s report informs us that for the past 13 months, prices have risen, but similar to the other reports, they have also reported the growth to be slowing down. Their report have also placed some of the blame on the MMR, but also said that “the underlying pace of activity should become more evident as we move through the summer months and the impact of MMR becomes clearer.’

It also looks likely that interest rates will be increased at some point this year, which will further add to the slowing demand for properties as buyers will be more reluctant to invest in a property. Once the market is settled, and the position of mortgage lending more apparent, it will be difficult to predict what the market will be like over th enext few years.

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