Higher UK Interest Rates Could Deflate UK Housing

October 9, 2014 Share Print 0

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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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.