Forecast for annual house price growth raised despite July blip

Property website Rightmove has raised its forecast for annual house price growth in 2014, despite a fall in values this month for the first time this year.

House prices have fallen 0.8 per cent so far this month, but the firm forecasts annual prices will lift 8 per cent this year, boosted by Help to Buy for first-time buyers, more affluent third-time buyers in 
the market and faster selling times.

Rightmove estimates house prices will continue to rise despite measures introduced by the Bank of England last month to curb prices such as new caps on high loan-to-income value loans and stronger affordability “stress tests” for borrowers.

The firm added it was seeing the beginnings of the same London ripple effect around large northern cities such as Manchester, Leeds, York and Liverpool.

Earlier this week the Office for National Statistics said house prices in London had risen at a record annual rate of 20.1 per cent while they were up 10.5 per cent across the UK.

Rightmove said the Government’s Help to Buy scheme had not only encouraged first-time buyers, but had freed up the market for richer third-time buyers who could afford larger properties.

Rightmove director Miles Shipside said: “The unleashing of this more affluent group, 
plus good supporting acts from first-time and second-time 
buyers, will mean that the musical chairs of trading up and down will continue in the second half of the year having been kick-started by Help to Buy in the first half.”