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‘Mixed signals’ from housing market, admits Bank

Adam Williams
Written By:
Adam Williams
Posted:
Updated:
18/02/2015

The Bank of England’s Monetary Policy Committee has warned of ‘mixed signals’ from the housing market as it voted to leave the base rate at 0.5%.

The committee voted 9-0 in favour of keeping the interest rate at its current level, noting a number of factors in the property market.

Minutes from the meeting stated the number of mortgage approvals rose towards the end of 2014, but said independent predictions for the year expected a weakening of the market.

“There had been mixed signals from the housing market,” the minutes said.

“Mortgage approvals for house purchase had risen slightly in December to a little over 60,000, the first increase for six months, and the average of the lenders’ house price indices had grown by 1.1% in January, a much bigger rise than expected, although this had been driven by 2% growth in the more volatile Halifax index.

“In contrast to these positive signals, provisional data from the RICS survey for January had suggested a slight weakening in the housing market.

“The net balance of market practitioners expecting prices to increase over the next three months had fallen back from +14 in December to close to zero in January, its lowest level since January 2013.”

The minutes also noted that while falling rates in the mortgage market would nominally aid the cash flow of borrowers, consumer spending was not expected to rise.

It said the committee felt inflation was likely to remain close to zero for most of 2015.


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