House prices fall for first time in 2014
Rightmove finds signs of cooling house prices as mortgage rules tighten and rate rise fears grow
House prices have fallen for the first time this year amid growing fears of interest rate rises and tightening mortgage regulations, according to new data from the online property portal Rightmove.
The average asking price for a UK home fell by 0.8 per cent between June and July, retreating from £272,275 to £270,159 in the website's first recorded price-drop since December 2013.
The £2,116 reduction shows the UK's annual growth rate "slowing from 7.7 per cent in the 12 months to June to 6.5 per cent in the year to July", the Daily Telegraph reports. The decrease is widely attributed to the stricter mortgage rules imposed by the Bank of England.
Last month the bank told lenders that loans of more than 4.5 times the borrower's income had to be capped in order to prevent reckless lending. This intervention, the Telegraph says, is now being felt by estate agents across the UK as mortgage approval rates drop.
Speaking to the Independent, Rightmove director Miles Shipside said: "Buyer confidence may have taken a knock with suggestions that mortgages are becoming harder to get, and repayments may get costlier sooner than originally anticipated, should rumours of an interest rate rise come true."
But despite July's fall in prices Rightmove actually upgraded its growth forecast for 2014 overall, predicting an eight per cent increase for the year – up from a previous estimate of six per cent.