British agents call for cut in interest rates
The British National Association of Estate Agents (NAEA) is calling on the Bank of England to reduce interest rates by 0,25% in its Monetary Policy Committee meeting this week.
In its May 2005 housing market report the NAEA found that the number of homes on the market had doubled compared to the same time last year. However consumer confidence is waning: enquires from potential new buyers have reduced significantly and it now takes over one month longer to sell a house compared to the same time last year.
Peter Bolton King, Chief Executive at the NAEA comments: “The question the MPC needs to ask is this: if not the housing market, then what is causing consumer concern over the state of the economy? Since 2003, levels of unemployment have been decreasing steadily and inflation levels have remained broadly the same. Interest rates remain low and currently sit two thirds below the level at which the housing market crashed in the late 1980s. The only variable compared with this time last year, when the economy was performing well, is the state of the housing market.”
Figures released by Nationwide today show that consumer confidence has fallen once again, while the British Retail Consortium has also revealed that spending on the high street was reduced by 0,5% in June, following a 2,4% fall in May. This further reinforces the NAEA’s message to the MPC that interest rates should be lowered.