| UK
House Prices Situation: Fairly stable, some small increases
UK
House Prices Forecast: Slowing growth in most areas
MPC
Report Makes Grim Reading For Homebuyers
A
new report published by the Bank of England's Monetary
Policy Committee (MPC) provides a depressing outlook
for many homeowners, predicting that financial conditions
for homeowners could continue to toughen in coming years.
The
report noted that inflation, one of
the main factors that influences interest
rates, has been "low and unusually
stable" for a number years now, leading to equally
low interest rates.
The
Bank's forecast is that this is unlikely to continue,
with the report commenting that "the [economic]
environment is unlikely to be so benign in the future"
– suggesting a medium-long term outlook of higher
inflation and interest rates.
The
report also highlighted the growth of secured debt over
the last decade – mortgages and other debt secured
on people's homes has risen from 75
per cent of household take-home pay in 1996 to 120 per
cent of household take-home pay today.
This
increase in debt load could cause any fall in house
prices to have a greater impact than would
otherwise be the case, the reported commented.
RICS
Figures Show Demand Overriding Cooling Prices
Recent
figures published by RICS, the Royal Institute of Chartered
Surveyors, show that while the housing market
might be cooling, property prices are
being sustained in many areas by a combination of strong
demand and restricted supply.
The
number of unsold properties on surveyors' books has
fallen to the lowest levels since August
2004, reflecting not only continued demand but perhaps
growing caution amongst sellers.
Similarly,
RICS expects new buyer enquiries to tail off a little
in coming months, as January's interest rate rises
make themselves felt through the market.
Despite
this, RICS feels that the market remains
fundamentally strong, with spokesman Jeremy Leaf saying
"there are few signs that the market will take
a significant turn for the worse."
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