UK Personal Finance

A recent survey by Nationwide has shown that the effects of the higher interest rate are causing the growth in house prices to stall. In June house prices grew by 11.1%, in July prices grew by only 0.1%. This has therefore cut the annual rate of growth to 9.9%.

This has been surprising as in the past three months house prices have been up by 2%, compared to the three months before that and down from Junes comparable figure of 2.2%. The survey has shown that house prices should be lower in the second half of the year.

The Bank of England has raised interest rates five times this year in an attempt to decrease inflation. The Banks key rate is now at 5.75%, it believed by analysts that the rates will reach 6% before the end of the year.

Consumer spending and house prices should slow down in the second half of the year. The sharp slowdown in house prices in July may show that homebuyers will start to think twice before straining due to the higher interest rates.