House price inflation in the UK eased in July as demand from first-time buyers weakened at the start of summer holidays, a survey by Hometrack revealed Monday.
Average value of a house in England and Wales increased 0.3 percent month-on-month in July, slower than a 0.4 percent gain in June. London continued to drive overall house price growth with prices rising 0.7 percent.
New buyer registrations are slowing as seasonal factors kick in, according to the survey report. First-time buyer demand for housing grew 1 percent in July, slowing from 1.6 percent in June and 2.5 percent in May, the report showed.
Property listings increased 2.4 percent, faster than a 1.6 percent rise in June.
"We do not expect the increased supply to ease the scarcity of homes for sale," said Richard Donnell, director of research at Hometrack. He noted that with increase in supply, there is risk that sellers may push asking prices too far ahead of demand, which, in turn, will result in lower sales later this year.
On a yearly basis, house prices climbed 1.3 percent, accelerating from the 0.8 percent gain in the previous month.
Meanwhile, in an interview to BBC, Business Secretary Vince Cable said that he feared the Help-To-Buy Scheme, the government's flagship scheme to revive the housing market, could create another housing bubble.
The scheme is a new government-backed initiative with an aim to help buyers purchase a property without large deposits.
"The Help to Buy scheme is actually quite complex,"Cable told BBC. "We have one part that's already operating, which is providing mortgages against new homes, nobody has questioned that."
"The proposal which hasn't yet been implemented, which is providing a guarantee for a limited range of mortgages, could be a problem. It could inflate the market," he said, adding that it could be a useful addition, if properly designed.
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