House price growth 'will stay slow'

Growth in house prices will stay slow over the coming months as borrowers' finances continue to come under pressure, it has been claimed.

Commenting after the Royal Institution of Chartered Surveyors (Rics) released a report saying that growth turned negative in August for the first time since 2005, market research group Global Insight said it expects price rises to be modest at best in coming months.

The firm said that the Rics survey adds "significant weight" to the opinion that the housing market has hit its peak and is now beginning to falter.

"We expect house price growth to trend gradually lower over the coming months and then settle down into an extended period of very modest rises," Global Insight said.

The organisation also reiterated the point that could lead to many people looking for remortgage deals – that mortgage costs will rise as introductory offer periods on home loans come to an end.

"A substantial number of homeowners will see their mortgage bills rise markedly during the latter months of the year as the cheap fixed rates that they took out two years ago expire," the statement explained.

According to the Rics survey, prices fell in eight of the 12 UK survey regions in August.

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