Rate increase
predicted by Nationwide
1/05/2007
Due to house inflation in recent months,
the interest rate is likely to increase and also they may be a
crash in the property market.
Nationwide has evaluated that house
prices have risen by £3,200 in the last 4 weeks.
Chief economist, Fionnuala Earley at
Nationwide said: “The pace of house price growth almost
doubled during April to 0.9%, up from 0.5% in March. “This
brings the annual rate of inflation back into double digits at
10.2% and the price of a typical house up to £180,314, which
is £16,741 higher than at this time last year.”
British Bankers Association (BBA) show
that mortgage
demand could step down due to rise of interest rates. In March
2007 the mortgage
approval figures were down by 8% compared with March 2006.
BBA’s director, David Dooks,
said: “In the last two months net lending has risen less
sharply and, compared to the same time last year, the number of
mortgages
approved in March was lower, indicating that weaker demand is
starting to emerge.”
Ms Earley commented: “With the
market already showing signs of cooling, too sharp a rate hike
could undermine market confidence and dry demand up swiftly. But
on top of this, they could also lead to widespread payment difficulties
which, in an illiquid market, could precipitate price falls.”
