Further slowdown in London house price inflation suggest that the British house price growth is set to soften in the months ahead, Hansen Lu, an economist at Capital Economics, said.
House price inflation rose to 5.0 percent in August from 4.5 percent in July, official data from ONS showed on October 17.
“However, with initial estimates tending to be revised down over time, we wouldn’t interpret today’s data as a sign of accelerating house price growth,” the economist noted.
In any event, with annual house price growth on the other main house price indices coming in at 2 – 4 percent, the official index still looks to be an outlier.
House price inflation in London slowed for the second successive month, falling to 2.6 percent in August from 2.9 percent in July.
The capital region marked the weakest house price pressures during the month.
“Looking ahead, house price movements in London tend to lead the rest of the market,” Lu predicted.
“That, alongside the already high level of prices across the country, weak new buyer enquiries and probable interest rate rises suggests that a resurgence in house price growth is unlikely,” the economist said.
Source: RTT News