London’s property market stagnated for a second month in August as buyers became reluctant to accept high asking prices amid the prospect of increasing borrowing costs, Hometrack Ltd. said. The survey of real-estate agents showed values were unchanged in the capital in a “stark” change from the sharp increases over the past year that helped propel national prices to a record. Across England and Wales, values grew 0.1 percent in August, the same as in July, bolstered by gains in commuter towns in the southeast.
There’s “evidence of growing resistance to rapid price rises in the London market,” said Richard Donnell, director of research at Hometrack. “Talk of a housing bubble and warning from the Bank of England have impacted sentiment.”
While the BOE’s benchmark interest rate has been at a record-low 0.5 percent since March 2009, policy makers Martin Weale and Ian McCafferty voted for an increase this month. Investors are betting the rate will increase to 0.75 percent in May, according to futures contracts.