THE DRAMATIC slowdown in the US housing market has inevitably raised fears that something similar could happen here.
After 17 rises in interest rates the US market has cooled markedly, leaving an overhang of unsold new homes, which is putting pressure on house prices.
Last week Toll Brothers, the largest US upmarket house builder, reported its first quarterly fall in prof its for four years and warned of a decline in confidence. Buyto-let investors have become increasingly scarce as mor tgage payments have r isen.
The slowdown is inevitably affecting US house building activity. In a largely upbeat statement earlier this week, materials group CRH said that after a very strong first half the pace of advance for its Americas products business has slowed as US residential construction activity moderated from high levels.
The UK housing scene may be polarising between a buoyant London market and f latter conditions in the rest of the country but there is little sign yet of an overall malaise setting in. However, property website Rightmove said asking prices for homes in the month to midAugust fell by 1.6 per cent as the south of England mini-boom ran out of steam. It also pointed to a seasonal slowdown and increasingly stretched buyer affordability and growing unsold stocks.
But for now, the City seems reassured by interim results from Persimmon last week when it pointed to a healthy housing market, forecast rising prices next year and said the recent rate rise had had no tangible effect on the group's business .
Yet Persimmon also said it did not expect to see significant selling price increases above the 3 per cent achieved in the first half of this year and the firm was redoubling its efforts to minimise hikes in build costs and overheads.
Persimmon has the advantage of producing results ahead of the key autumn house selling season. Rivals who report over the coming weeks may have a less promising story to tell.