Terror attacks 'will hit house prices'

The market remains strong, but fallout from US attacks is expected

House prices in the UK will be affected by the US terror attacks, experts warned as they released a new housing market report.

A Royal Institute of Chartered Surveyors (Rics) survey of three months to August showed the housing market remained strong - with completed sales reaching their second highest level since 1993.

The international situation will not help, particularly given the signs of a slowing economy

Rics' Ian Perry

But Rics' Ian Perry said: "The attack on the US and the subsequent international uncertainty will undoubtedly have an effect on the UK economy and with it the housing market."

The survey also showed that prices rose by 7% over the same period, with demand for property outstripping supply.

East Anglia saw the highest price rises, followed by the north west, and the north, while London witnessed a slight cooling off.

Mr Perry added: "The stabilisation of the market in the summer and the forecast slowdown are a welcome pause after the rapid rises in the first half of the year.

"The cut in interest rates will help support the market, but the international situation will not help, particularly given the signs of a slowing economy."

Despite this month's quarter point cut in interest rates, the Halifax warned the housing market is set to slow down as recession in the manufacturing sector damages consumer confidence.