Money News
Latest data (February) from the Halifax shows the housing market continuing to slow down - the 0.3% decline during the month taking the annual rate of inflation down to 4.2% from 4.5%. Meanwhile, the average price of a property in the UK now stands at £196,649.
Despite slowing over the last 6 months, Martin Ellis, the Halifax's chief economist, believes the market is supported by sound economic fundamentals. Indeed, the latest official figures confirm the UK's gross domestic product (GDP) increased by 0.6% between Q3 2007 and Q4 2007 - in line with the economy's long-term rate of growth, but slightly below the 0.7% increase in Q3 2007. Strength of the labour market should also continue to support the housing market.
Ellis adds that despite the Bank of England's Monetary Policy Committee being likely to adopt a cautious approach, due to concerns over inflationary pressures and an absence of signs that the economy is slowing sharply, expectations are that two further interest rate cuts will be sanctioned this year. And lower interest rates should prevent the economy slowing too sharply, thereby helping to support a housing market the mortgage lender believes will be flat.
06 March 2008 © Moneyextra.com
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