Liquidity 'still the problem' for housing market

The liquidity situation is the prime difficulty facing the housing market at present, surveyor firm Connells has said.

Managing Director Ross Bowen made the comment in response to news of the latest Land Registry house price figures.

The statistics for May were the ninth month in a row in which the annual rate of house price inflation has fallen, although the month-on-month trend from April was for no change in prices.

Describing the current market as being in "uncharted waters", Mr Bowen said: "It's not lack of demand for homes that's putting pressure on house prices, but lack of liquidity in the money markets."

He suggested the Bank of England needs to inject more liquidity into the money markets, rather than cutting the base rate.

The Land Registry figures for May showed that the annual rate of house price inflation in May was 1.8 per cent, compared with 2.7 per cent in April and 3.6 per cent in March.