BANK of England governor Mark Carney expects the recent surge in the property market to cool by 2016, as figures today confirm that house sales have returned to levels last seen in early 2008.
The governor said that he is projecting “a continuation of the current momentum into 2014, before decelerating around the middle of 2015 to 2016,” while under the spotlight of the MPs on the Treasury select committee yesterday afternoon.
Financial Policy Committee member Richard Sharp, also appearing at the committee, suggested now would be a good time for home owners to opt for a fixed-rate mortgage. “Now rates are close to the zero rate bound, so you’ve got to make a judgement about the future. Mine is, this would be a good time,” he said.
Meanwhile, according to figures released by the Royal Institution of Chartered Surveyors (RICS) this morning, the number of homes sold per chartered surveyor hit 21.3 in December, the highest recorded for nearly six years. Activity has more than doubled since the market’s low point at the beginning of 2009.
Surveyors’ price expectations for the next 12 months reached the highest level since 1999 in the final quarter of 2013.
Data released by the Council of Mortgage Lenders (CML) yesterday showed mortgage lending up 14.9 per cent in the year to November, projecting further price hikes in the year ahead. IHS Global Insight now expects that house prices will rise by eight per cent during 2014.
Their chief UK economist Howard Archer says that “there is a genuine possibility that this could prove to be a conservative forecast as there remains a very real danger that house prices could really take off over the coming months