Estate agent rubbishes optimism

By GUY DRESSER
Updated:

 

ESTATE agents have today rubbished claims by the Nationwide Building Society that house prices are still rising. Nationwide claimed yesterday in its monthly house price survey that property values had risen by 2.1% during July, despite previous evidence from other experts that the market was beginning to slow down.

The July surge took annual house price inflation to 20.3%, the first time for more than a year that it has been above 20%.

But Haart, a leading independent firm of estate agents, refuted the figures and said that property sellers are having to drop prices to attract would-be buyers.

Paul Smith, chief executive of Haart, said the figures had come as a complete shock to him.

He added: 'This data flies in the face of everything we are seeing across our network. Our figures for July show that sellers are seeing up to 5% wiped off their asking prices compared with only a 1% reduction in May.

'Not only that, the number of new buyers is continuing to fall and decreased by 22% during the last two months. House price surveys such as these have an impact interest rate decisions, so it is vitally important they accurately reflect the market situation.'

The Nationwide's group economist Alex Bannister countered that while recent anecdotal evidence had suggested the market might be starting to slow, the latest figures matched the continued strength of retail sales and mortgage lending.

Previous apparent evidence of downturns had not always translated into significant falls especially when there was no deterioration in the general economy.

Economists, however, said that yesterday's survey from the Nationwide and Bank of England figures that show Britons now owe more than £1trillion make a rise in base rates next week 'almost inevitable'.

The Bank's figures mean that an average of £16,955 is owed by every man, woman and child on mortgages, personal loans, overdrafts and credit cards.

The Monetary Policy Committee starts its monthly two-day meeting next Wednesday, with many pundits forecasting another 0.25 point rise to 4.75%.


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