'Cinderella culture' coming to an end

The Royal Institution of Chartered Surveyors (Rics) has responded to housing market data from Nationwide and the British Bankers' Association (BBA), saying that the subdued figures suggest that Britain's 'Cinderella culture' is approaching its end.

Nationwide's house price report revealed that monthly growth stood at just 0.1 per cent in July, while the BBA said that the number of mortgage approvals in June were eight per cent down on 12 months earlier.

Oliver Gilmartin, Rics senior economist, said that the expected slowdown in the housing market is "finally upon us", with interest rate rises manifesting themselves in the minds of homebuyers.

"We anticipate a sluggish period going into Christmas, although price declines are not on the cards as employment continues to show solid gains," Mr Gilmartin continued.

"Consumer spending is likely to ease back going forward as the wealth effects that have been supporting a 'Cinderella culture' start to wane. We continue to expect a further interest rate hike however, despite the softer tone of today's data."

Nationwide concurred with this prediction, saying that an inflation figure that was above the government's target for the 14th consecutive month in June and ongoing resilience in the economy gave some ammunition to the "hawks" on the monetary policy committee.

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