Cooling off period will see housing sector divide into strong core areas and weak peripheral districts, experts warn The slowdown in the British housing market will sort out the wheat from the chaff among residential districts over the next 18 months, experts warn. The latest 0.25 per cent rise in interest rates announced last week is cooling the market, commentators say. Interest rates stand at 4.75 per cent following five consecutive rises since November. According to Britain's biggest mortgage lender, Halifax Bank, prices rose 1.3 per cent in June, a 'clear step down' on the 2 per cent average so far this year. Surveyors and mortgage lenders say the market is slowing. Estate agent FPDSavills warned that some areas that had enjoyed strongest price growth recently would suffer most during a downturn. FPDSavills director Richard Donnell said: 'There is a big difference between strong house price growth in a particular location and an area making a quantum leap. The slowdown in house price growth we expect to occur over the next 12 to 18 months will sort out the wheat from the chaff. 'Buyers should tread carefully before diving into an 'up-and-coming' area. Once the hype has died down, and house price growth slows, it is those who could only afford to buy on the fringes of an area that could well see the value of their property underperform.' In a booming sales market, price rises ripple out of core areas to the fringes, which become confused as being one and the same. However, a slowdown would see polarisation between strong core areas and weak peripheral markets re-emerging, he warned. 'It is akin to the tide moving out and leaving some properties high and dry - it is a phenomenon that has followed previous booms,' he said. Such a scenario was likely to happen in Clapham, south London. 'At Clapham Common, in a strong market it stretches up into north Clapham to Stockwell, but when the market turns it is going to retreat back to Clapham Common,' he said. Those areas which had undergone the most gentrification, had strong local economies, extensive transport links and plenty of high-quality amenities, particularly good schools, would survive a slowdown best, he said. 'People are going to shop around more than they have to date to find the place with the best transport links and amenities. Homes that are a 20 minutes' walk away from the train station will suffer, those that are five minutes' walk away will not,' he said. He said strong price rises in northern England over the past year did not necessarily mean the entire region was up and coming. Some areas were simply catching up with southern England's earlier housing boom. Knight Frank partner Liam Bailey said: 'Those areas that are secondary in the market are the first to be hit in a downturn. Confidence is at the heart of this and confidence in the best areas, even though they are more expensive, stays higher even in a downturn. People become more concerned about peripheral areas.' He believed Leeds and Rotherham were up-and-coming areas in northern England that would survive a downturn. Rotherham's manufacturing sector had recovered from its structural decline of 15 years ago, and its close proximity to Sheffield and major motorways made it easily accessible to commuters, boosting its credentials as an office location, he said. 'This is a classic emerging market. It may be an unsexy location, but there is substance behind it.' Mr Bailey was confident about Leeds because it had Britain's fastest-growing population and employment levels. 'The Leeds market has exploded in the past five years. It has become an established European centre in financial services. It had an industrial recession earlier than many other cities about 20-30 years ago and has come back quicker,' he said. An industry source cited west Wales and Lincolnshire as areas that would lose out during a downturn because they had poor transport connections and weak economies.