House prices have surpassed their previous 2007 peak, rising by 11.8 per cent in a year in the UK and 26 per cent in London, according to the latest Nationwide House Price Index. Commenting, Bien Media client Nicholas Ayre, managing director of home buying agency Home Fusion, says: ‘Despite house prices recording their fourteenth successive monthly increase in June, the tide is most definitely turning. Buyers are thinking twice about making such a major investment, worried about overpaying. Another growing concern is affordability, particularly with the looming threat of an interest rate rise, which is now looking increasingly likely.
‘Many of those buying for cash are looking at potential growth and worried about the flattening out in the market. The question they are asking is: how long will I now have to wait to realise some growth?
‘London has seen considerable growth over the past couple of years, with the average London property reaching £400,000 for the first time, and prices in the capital around 30 per cent above their 2007 highs. However, we expect the slowdown that agents are seeing anecdotally to start filtering through to the official indices in coming months.
‘While the Financial Policy Committee tinkers with lending limits to keep a lid on soaring prices, the problem is that it doesn’t have the tools to sort out the fundamental problem – that we are not building enough homes.’