Nationwide: house prices will cool
According to the Nationwide Building Society, the UK housing market is set to cool further even if interest rates have peaked.
The prediction came as the mortgage lender's monthly survey showed a 0.4% increase in prices this month, bringing the annual rate of growth down below 10%.
The Bank of England has left interest rates at 5.25% since delivering a shock increase in January. While Governor Mervyn King is still expected to push rates up once more, the financial markets' certainty of another move diminshed after it was revealed that one of the central bank's policy makers voted to cut rates this month.
Fionnuala Earley, chief economist at the Nationwide, said: "The underlying trend is clearly softening as interest rate rises take effect." Pointing to declines in mortgage approvals and buyer enquiries, Ms Earley added that "leading indicators of house price inflation also suggest that the underlying trend will continue to slow this year."
The prediction came as the mortgage lender's monthly survey showed a 0.4% increase in prices this month, bringing the annual rate of growth down below 10%.
The Bank of England has left interest rates at 5.25% since delivering a shock increase in January. While Governor Mervyn King is still expected to push rates up once more, the financial markets' certainty of another move diminshed after it was revealed that one of the central bank's policy makers voted to cut rates this month.
Fionnuala Earley, chief economist at the Nationwide, said: "The underlying trend is clearly softening as interest rate rises take effect." Pointing to declines in mortgage approvals and buyer enquiries, Ms Earley added that "leading indicators of house price inflation also suggest that the underlying trend will continue to slow this year."
posted by ew at
8:19 AM
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