House price inflation slows

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While house prices did increase in August, they only rose at a slow rate, the latest figures show.

Halifax has revealed that house prices in the UK increased by just 0.4 per cent in August - making it the third month in the last four that house price inflation has been below 0.5 per cent.

This means that the three-month house price inflation - a good indicator of long-term trends in the market - has fallen from 4.5 per cent in March to 1.6 per cent now.

Landlords looking to expand their portfolio will typically have to pay £199,770 for a new property.

Halifax also suggested that negative real earnings growth so far this year could mean that people have less money available to buy property and so might look to rent for longer.

"Whilst the market remains robust, [the data] provides further evidence that house price inflation has slowed since the beginning of the year," commented Martin Ellis, chief economist at the lender.

"The downward trend in house price growth is expected to continue over the remainder of 2007 as the five interest rate rises since last summer have an increasing impact on household spending and housing demand."

Recently, Rics reported that first-time buyers in particular could have to rent for the foreseeable future unless house prices came down.

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