Rate rises hit home
Updated on 30 May 2007
Could recent interest rate rises signal the end of the buy-to-let-boom?
There are growing signs that the recent interest rate rises are starting to have a cooling effect on the property market.
The landed feeling the pinch
Today's government figures, called the house price index, say that this month the average house sold for just under £180,000. That's an increase of just 0.6 per cent. Prior to the release of these figures, the increase had been around one per cent - so a slight dip in house prices can be seen.
These figures come from the Land Registry and are very accurate because they are based on the prices for which properties actually sold.
Passing on the cost to the have-nots
There are other signs of a slowing housing market. Figures from the Royal Institute of Chartered Surveyors (RICS) show landlords selling off buy-to-lets at the highest rate in two years.
Meanwhile increasing numbers of landlords say they will raise rents or sell their properties because repayments are too high.
A divided society
But prices are not actually coming down, which means affordability is fast becoming a major problem.
The average mortgage now at £150,000 there is a great deal of pressure on borrowers to undertake ever-growing amounts.
A report from Loughborough and Aberdeen universities says the burden of mortgage debt is turning young couples into "bonded labourers" and warns that the cost of buying a home will create "a grossly divided society last seen in the 19th and early 20th century."
