Interest rate hikes calming house price growth in UK

UK housebuilder Wilson Bowden today offered further evidence that interest rate hikes were starting to restrain rampant house price growth in Britain.

The group said rate rises were “undoubtedly” having a calming impact on the property market, with competition for sales increasing and deals taking longer to complete.

But Wilson said it remained on target to meet expectations for its annual results after turnover surged 21% to a record £592.9m (€875m) in the six months to June 30.

Pre-tax profits also improved 29% to £118.2m (€174.5m), but investors were warned that comparisons over the next six months would be tougher as many people delayed buying a house in 2003 until the Iraq war was over.

Chairman David Wilson said: “I believe that the strategy we have in place enables us to cope with changing market conditions.”

Properties at its main housing business, David Wilson Homes, cost 3.4% more than a year ago at £211,900 (€312,767) with inflation at its highest in northern regions.

Leicester-based Wilson added that forward orders continued to rise and the group had logged 75% of its full-year reservations by the end of June.