Join the debate: better to buy near a good school or pay to go private?

Rises in house prices have slowed and confidence in the housing market has receded over the past month as it digested the implications of the Bank of England’s interest-rate rise, two studies published today show.

Rightmove, the property website, said that asking prices for homes had risen by 1.5 per cent in the month to the second week in November. It was the second consecutive month of strong house price inflation but down from a 2 per cent rise recorded in October. In the year to November, house prices have risen 12.4 per cent, Rightmove said, up from the 11.5 per cent recorded the previous month.

The double-digit house price inflation suggested by the website’s figures is far stronger than analysts had forecast at the beginning of this year.

However, there were signs that interest-rate rises in August and November may be taking their toll of the market, making homes even harder to afford for first-time buyers.

Another website, propertyfinder.com, said that people’s confidence in the market had slipped. Its survey showed that people expected house prices to rise by 5.2 per cent over the coming 12 months, down from 5.5 per cent in October.

Both studies showed a strong regional disparity. Rightmove said that average asking prices had risen by 18.2 per cent in London over the past year, and by 16.3 per cent in the South East of England, compared with a rise of only 3.1 per cent in the North of England.

The study by Propertyfinder.com found that confidence in the market was strongest in Greater London and weakest in the North and East Anglia.

Miles Shipside, of Rightmove, said: “Southern sellers are responsible for pushing up the national growth rate into double figures. With the northern housing markets already stabilising, and the South being driven ever higher by shortage of supply, the interest-rate rise can only add to the cost of home ownership. Until more suitable properties are built to satisfy the demands of the buoyant southern economy, their prices will continue to rise.”

Rightmove said that the average time for a property to be on the market had dipped to below 75 days, the shortest time since June. Its figures also showed the substantial impact of stamp duty on the market. The tax has a threshold of £125,000, but Rightmove said that exempted only one in six of current sales.