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Research points to end of the house price boom

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Research suggests England’s house price boom may have hit its peak.

Estate agent Haart, which operates around 100 branches, says it sees decreasing demand in the housing market, according to the FT.

Haart chief executive Paul Smith says: “We believe the nation has now neared the limit in terms of price rises.”

The estate agent says UK mortgage approvals fell 8.6 per cent in April.

The Royal Institute of Chartered Surveyors says this is partly due to a rush of investors trying to beat a stamp duty surcharge.

But Haart says reduced economic growth and completely unaffordable house prices are also playing a part.

Investment bank Jefferies equity analyst Mike Prew notes figures from Rics which show housing inquiries declined in April at their second highest rate since the financial crisis in 2008.

Prew says this “signals the slowdown could morph into a period of sustained house price deflation.”

House price inflation has been at it highest in London and the South-East.

Hometrack director of research Richard Donnell told the newspaper: “There are plenty of headwinds facing London irrespective of the referendum vote. It’s down to affordability — at some point you have to run out of buyers.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. If true (and sustained) this won’t half stuff the buy to let. Numerous tax impositions, now no capital appreciation and possible rent control in future. Great investment

  2. My opinion is that house prices and the housing market in general have been buoyed continually by buy-to-let, Help To Buy, and foreign investment in London. If these factors are removed then the market becomes more reliant on the ability of “normal” people to buy a residential property. If property is unaffordable (and surely there’s no dispute about that?) then house prices should move downwards. The argument about demand supporting prices is not logical, if people cannot afford to buy, they cannot afford to buy. So maybe the bubble is finally about to burst? Is that an entirely bad thing?

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