Rate rises knock housing market confidence

Three interest rate rises in six months are beginning to have an impact on buyers in the housing market, according to new research.

Some 80.5 per cent of buyers and sellers this month expect house prices to rise by five per cent over the next 12 months, down from the 84 per cent who predicted rises of 6.3 per cent in December, according to new research from Propertyfinder.com.

"The impact of the August and November rate hikes wasn't felt immediately," said Warren Bright, chief executive of Propertyfinder.

"Recent reports from the Royal Institution of Chartered Surveyors and Halifax suggested some of the heat may already have begun to dissipate. The latest move by the monetary policy committee will further increase the pressure on mortgage borrowers."

However, this is unlikely to have an immediate effect on rampant house price inflation as sellers now report they will accept no less than 3.8 per cent short of the asking price, down from 4.7 per cent last month.

Furthermore, some buyers are even making offers above the asking price in a bid to secure the purchase of a home.