Date Published 21 August 2014
Sometimes we forget how the housing market is driven, comprised of several key elements, notably the element of demand. It's a very simple observation that rules the world over when it comes to all elements of business: with high demand comes higher prices, and likewise lower demand means lower prices. So just why have growth rates of house prices slowed so dramatically over the past few months in an era of booming prices?
The surging rates in house prices in recent years (particularly prominent in London) is partly down to the rise in demand for property; more people are on the look out for property and therefore the market is reflecting this attitude through its pricing. However, recent studies have shown that production may have overtaken demand as price rates have begun to 'slow down' and stabilise in certain areas.
According to a statement made by Rightmove, the month of August recorded the lowest level of growth in house prices since the end of last year coming in at 0.7% - a dramatic slide compared to the sky-high figure recorded for May, which stood at 2.6%.
The Royal Institution of Chartered Surveyors (RICS) have revealed that the basic cause in this dip in growth is due to the fact that there are currently more properties on the market than potential suitors. A recent survey by the RICS has indicated a decline in demand for houses, resulting in a dip in growth. However, the institution believe that prices are set to continue to rise but perhaps at slower, less inflated rates.
This comes as good news for both buyers and sellers, making a refreshing change from news that often appeals to one and not the other in recent times. While house prices continue to rise, sellers will be looking to cash in on the higher prices, but with slower rates of growth buyers will be looking for good deals in the market. As expected, now might be the right time to make a move in a market that is forever fluctuating.