Price growth "to slow sharply"

The Royal Institution of Chartered Surveyors (Rics) has responded to strong house price figures from the Department for Communities and Local Government (DCLG) by stressing that growth is likely to slow significantly in coming months.

According to the DCLG, the average house price was £218,479 in July and annual inflation stood at 12.4 per cent.

Rics argued that, while these figures suggest the housing sector is "continuing to power ahead", the period to which they relate does not bear much resemblance to the current market situation.

Simon Rubinsohn, chief economist with the group, also illustrated the impact that recent developments could have on people looking for bad credit mortgages.

"These figures relate to July and do not begin to reflect the more recent turmoil in financial markets," he said.

"Even without a material round of job losses in the financial services industry, which is an increasing risk, we would expect house price inflation to slow sharply over the coming months as access to mortgage finance is disrupted particularly for higher risk borrowers."

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