House prices are slowing down in my area

Filed Under Finance

House prices in Chelmsford, the main town in my area, seem to be static at the moment and I’ve noticed that a lot of houses that have been been on Right Move for at least three months, are still unsold. Some houses in Chelmsford that had sold are now back on the market again.

So in this part of Essex, at least, we are seeing a general slowdown in house prices and sales.

Of course August is a slow time of year as many people go on holiday, but as we reported on Money High Street yesterday, house prices in London have actually fallen in August and that is the first time that has happened for a year.

Couple that with news about the number of first time buyers falling too and it isn’t difficult to see a trend appearing. For the next few months, at least, we will see almost zero growth in house prices.

Some will probably be gloomy about this, but I think it is actually good news for all of us as the Bank of England can also see the cooling property market. Their strategy of turning down inflation by increasing interest rates looks like it is working. Hopefully they will delay, or even cancel, another interest rate rise and that would be good news, except for those with more savings than borrowings, of course.

It is important for major builders to be aware of economic and market trends so the news that Persimmon is still upbeat about the property market should calm the fears of people fearing a crash in house prices. Maybe, they are right to feel confident, though, as they will benefit from Gordon Browns plans to build 3 million homes over the next 12 years.

So we shouldn’t be too upset if the value of our homes don’t increase for a while. At least we won’t be paying more for our mortgages.