RICS states further interest rate cuts needed to avoid house price meltdown
Officials from the Royal Institute of Chartered Surveyors have stated that the state of falling property prices in the UK could result in the same sort of house price crash seen in the 1990s, and that in order to avoid this sort of meltdown further interest rate cuts are needed. Many industry experts expected the Bank of England to cut the rate of interest in January, but the rate remained unchanged after the Monetary Policy Committee meeting.
One estate agent stated that the latest RICS survey made for gloomy reading, and was 'maybe the worst we have had in 17 years'.
According to reports the number of estate agents that have reported plummeting property prices is now at its highest since 1992. One spokesman from RICS stated: 'The Bank of England may have to cut rates further if the market is to remain stable.'
Another estate agent said that the house price crisis could go on for a number of years, adding: 'The quarter point reduction was welcomed but we need more to follow in the New Year if the early 90s property recession is to be averted. If we don't, the country can expect a bleak time for the next two to five years.'
According to one estate agent: 'Home Information Packs plus Christmas plus interest rates plus credit crunch equals hard times.' Many experts are now expecting a further interest rate cut in February, with possibly a second by the middle of the year. Many have blamed the problems in the housing market on Home Information Packs, which came into force for all residential properties in December.
29th January 2008