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Interest rate hikes put the brakes on UK's red-hot property market 

Britain's scorching housing market shows signs of slowing as rising mortgage rates hit demand

Interest rate hikes have dampened the UK’s scorching property market, with experts predicting prices will ‘stabilize’

  • The South West saw the biggest increase, with prices up 17% in August
  • London recorded the weakest annual growth, of 8.3%
  • Experts suggest this is the start of a downward trajectory for stocks as official figures race to catch up with market turmoil

The booming UK housing market is showing signs of slowing as rising mortgage rates hit demand.

House prices rose 0.9% to a record £295,903 in August, according to the Office for National Statistics.

It left house prices 13.6% higher than August last year, adding £36,000 to the value of an average home. But that was slower than the 16% rise seen in the year through July.

Britain's scorching housing market shows signs of slowing as rising mortgage rates hit demand

Britain’s scorching housing market shows signs of slowing as rising mortgage rates hit demand

The figures are just the latest to suggest the housing market is slowing after a pandemic boom.

Andrew Montlake, of mortgage broker Coreco, said: “There is unprecedented uncertainty right now.” “Property prices are expected to come under real pressure, but the steep 10-15% declines that some are predicting are frankly unrealistic.

“Prices are much more likely to stagnate than to cross the floor.”

The South West saw the biggest surge in growth, with prices up 17% on the year to August. London recorded the weakest annual growth, at 8.3%.

Experts suggest this is the start of a downward trajectory for stocks as official numbers race to catch up with market turbulence.

Interactive Investor analyst Myron Jobson said: “There is a clear disconnect between the latest data and what is happening. More recent house price indices paint a picture of a losing market, with rising mortgage rates and the cost of living crisis cooling demand.

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