Rate boost predicted for 2008

The UK property market is set to be boosted by as many as four interest rate cuts in 2008, it has been predicted.

Both the Centre for Economics and Business Research and the European bank have forecast that rates could be slashed as the Bank of England seeks to boost the UK economy, homemove.co.uk reports.

Such a move would reverse the increases in rates made in the past 16 months, which saw five rate rises of 0.25 per cent between August 2006 and July 2007.

This month has already seen the Bank of England voting unanimously to trim the base rate from 5.75 per cent to 5.5 per cent.

Such a situation could ease housing affordability by pushing down mortgage interest rates, which in turn could raise demand for new homes.

The Royal Institution of Chartered Surveyors has said the first-time buyer market will see a "gradual improvement" in 2008.


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