Insurance News Archive

Interest rate hikes 'cooling off' housing market

The housing market is experiencing a downturn as a result of recent interest rate hikes, new research suggests.

Residential property website Rightmove's latest monthly monitor reveals that the annual growth rate of the market decreased from 13.5 per cent to 11.5 per cent between January and February 2007.

The percentage of consumers expecting the property market to grow in the coming two months also decreased by six per cent, according to website Propertyfinder's monthly survey.

Chief executive of the group, Warren Bright, speculated that while last year's interest rates had only 'dampened' the market, last month's surprise rate hike to 5.25 per cent created a "much bigger impact".

Rightmove's commercial director, Miles Shipside, said that with the prospect of a further interest rate hike in the near future "it looks like we have finally reached the point where the market is highly interest rate sensitive".

19 Feb 2007