Housing market 'in line for modest rate boost'

The housing market will see a modest rate boost, which could help the home building industry, Nationwide has predicted.

Chief Nationwide economist Fionnuala Earley made the prediction as the lender revealed its December house price figures.

Although these showed a monthly fall of 0.5 per cent in house prices, the drop was less than the 0.8 per cent recorded in November.

Ms Earley said that there would be at least two more rate cuts in 2008, which would "probably help market activity recover" as the year went on, although she predicted this boost would not be as great as when rates were cut in 2005 because they are starting at a higher level.

The annual house price inflation rate stated by Nationwide is now 4.8 per cent, compared with 6.9 per cent in November.

In related news, figures published by the British Bankers' Association this week show that unsecured lending is still rising, although by less in November than it did in October.


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