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CML chief: Housing market to come off boil

July 16, 2007 by admin  
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The director general of the Council of Mortgage Lenders (CML), Michael Coogan, has claimed that house price inflation will cool off dramatically next year.

Speaking to Reuters, he said that prices seem likely to record their smallest increase in a decade, at maybe just two to three per cent, partially due to rises in interest rates.

The Bank of England set the new base rate at 5.75 per cent two weeks ago – the fifth rise in a year – and many analysts predict further increases in coming months.

Mr Coogan counselled against fears of a slump in prices: “I don’t believe there will be a crash. But clearly a slowdown is more likely”, he said, pointing to the still robust economy as a bulwark against forced house sales.

He added that “we’ve already seen on the consumer credit side that loans have been reduced and people are looking to repay their credit card and other debts… That trend is likely to continue.”

The prospect of a dramatic slowdown seems distant, however: Figures released by the Department of Communities and Local Government today show still-strong inflation, with annual house price rises remaining in the double percentage figures: inflation in prices stood at 10.9 per cent in May, against 11.3 per cent the previous month.

The figures also showed regional variations – with inflation particularly strong in London, Scotland and Northern Ireland.

http://uk.reuters.com/article/personalFinanceNews/idUKNOA64267220070716?rpc=401&
http://business.timesonline.co.uk/tol/business/economics/article2083427.ece




Tags: consumer, price, crash, ece, cml, show, I don't believe, price inflation

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