You are here: Home - First Time Buyers - News -

Early interest rise needed to cool housing market

0
Written by:
12/05/2014
The Confederation of British Industry (CBI) has revised its interest rate predictions as it expects an earlier increase in base rate to head off rapidly increasing house prices.

Figures released by Halifax last week showed house prices had risen by 8.5% in the year to April and the CBI anticipates further increases of 8.2% this year and 5.1% in 2015.

The CBI said it now expects the Bank of England to increase the Base Rate in the first quarter of 2015, forecasting a 0.25% rise from the central bank. It has previously anticipated an increase in the third quarter of next year.

CBI director-general John Cridland said careful attention must be paid to the housing market by government and policy makers.

“We have to remain alert to the risks posed by unsustainable house price inflation, and the Financial Policy Committee is poised to act when necessary,” he warned.

“Housing has come back under the spotlight as annual house price inflation figures have reached double digits on some measures. While housing transactions are still running almost 30% below their last peak in 2006, but they are picking up steadily.

“Although London house prices have risen 25% above the 2008 peak, this has in part been fuelled by foreign cash buyers. Outside London, prices remain around 2% below peak figures with an even greater difference when you move outside the South East.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Sorry. No data so far.

Guide to borrowing past retirement age

As an older borrower, you may be concerned that a lender will not offer you a mortgage pas...

Mortgage market biased against homeowners

Buy-to-let property investors are unfairly favoured in the mortgage market, an independent...

Should buy-to-let investors ‘go Dutch’?

The Netherlands is revealed as Europe’s top buy-to-let property hotspot

Private sector tenants in poverty double in decade

The number of private rented sector tenants in poverty has doubled in the last decade from...

Large mortgage broker firm launches with fees of over 1%

An insurance firm has launched a mortgage advice service

Second steppers targeting detached properties

Those living in their first home are increasingly looking to reduce the steps to their lon...

Mortgage Calculators

Read previous post:
Economists heap pressure on Osborne over Help to Buy

Prominent economists have added to calls for the government to pull back from the mortgage guarantee element of its Help...

Close