Halifax survey shows U.K. housing price growth cools off

Halifax survey shows U.K. housing price growth cools off
LONDON: Housing market in the U.K. has started showing signs of a cooling down as prices rose at the weakest monthly pace this year in May, according to a survey Thursday.

The Halifax house price survey showed that prices rose just 0.3 per cent on the month in May, down from 0.9 per cent recorded in April. The mortgage lender said home buyers are showing lesser interest in buying properties and there could be further fall in the price growth.

Halifax chief economist Martin Ellis said higher interest rates, the negative trend in real earnings growth and rising food prices are likely to impact householders' finances over the coming months, curbing housing demand. However, housing supply shortages and a strong economic situation would prevent the market from crashing, he added.

Many analysts say house prices will continue to fall in the coming months as demand is curtailed by higher interest rates, modest increases in disposable income and high house prices. However, they feel there is no serious threat existing of a house price crash.

House price inflation for the year was in double digit figures, at 10.6 per cent.

The survey showed the average price of a house at 196,893 pounds.

Meanwhile, the Bank of England's Monetary Policy Committee decided Thursday to hold the interest rates at 5.5 per cent.