The annual house price inflation rate has dropped to its lowest level in nearly a year following slow growth this month, new figures show.
According to Nationwide building society, there was only a 0.7 per cent increase in house prices during September.
While this was an improvement on August's 0.6 per cent figure and overcame predictions that price growth would take a further dip to hit 0.4 per cent, statistics for the entire year fell to their slowest growth rate since last October.
The fact that inflation continued at all is testimony to the strength of the market which is still fuelled by buyer demand, however Nationwide suggested purchases are likely to drop due to the high cost of borrowing due to the recent interest rate rises.
In addition, Nationwide economist Fionnuala Earley warned that the credit crisis could see banks pass on the increased charges they are facing to customers by raising fees and interest on loans.
"The message from lenders is clearly that from now on, risk must have its price," she said.
"As a result, highly leveraged borrowing will remain less attractive and lending volumes in this segment may decline."
This may, however, be avoided if the Bank of England moves to reduce the base rate of interest in the future, which Nationwide said may be on the cards as it suggested the outlook on rates had "shifted from hawkish to dovish".
http://www.stride.co.uk/home-buying-and-hips/house-price-growth-slowest-in-a-year-18297075
