Higher UK Interest Rates Could Deflate UK Housing

The continuing squeeze on workers’ pay packets and the prospect of higher interest rates have sapped the appetite of many homebuyers, according to the surveyors’ body RICS.

Uncertainty in Scotland ahead of the independence referendum and a refusal among some buyers in London to pay sky-high prices also contributed to a third consecutive month of falling demand, said RICS.

Simon Rubinsohn, RICS chief economist, said momentum in the market had slowed to a level not seen since June 2013 as homebuyers became more cost-conscious.

“Demand and supply are looking a little more balanced, which is removing some of the upward pressure in prices, particularly in London,” he said.

 
“Part of this is down to the Bank of England becoming more vocal about the risks, part of this is down to affordability, part of this is down to the new mortgage rules and part of this is down to expectations of higher interest rates.

via The Guardian

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