Peter Rollings commenting following this morning's figures from Halifax and the interest rate decision from the MPC
Thu 07 Jan 2010
"Nationally, house prices finished the year higher than they started - and price growth was even stronger in the capital, where the property market recovery began. Strong buyer demand and a severe shortage of supply drove the increase in London prices last year, but the supply of homes for sale has been catching up and we expect this trend to continue in the coming months. Already this year, we've seen a large numbers of homeowners looking to put their homes on the market - more confident about moving and the market outlook. This is excellent news for the market and we expect London house prices to grow at a sustainable level of between 5% and 7% in 2010.
But, while the outlook for the UK market continues to improve, there are still challenges ahead for the coming year - and the Bank of England policy-makers have a big part to play in deciding the speed of recovery. There is growing speculation that an increase in the base rate is looming in the next few months, but the Bank must resist such a move. Transactions in the property market are still far below the average and keeping the cost of borrowing down is essential in increasing consumer confidence, maintaining demand from buyers and making it easier for homeowners to meet their mortgage payments."-- ends --
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