Although house prices have, in some cases, more than doubled over the past 5 years, the number of mortgages that have been taken out have dropped 11,000 below the average of 94,000 in the last 3 months.
The Bank of England seems to be optimistic in thinking that lending will pick up from December onwards, but not to the levels that have been experienced in the past. It is thought that interest rates will be put on hold, due to the current slowdown in the economy, to try and balance consumer spending, which has remained fairly steady, and prices within the housing market.
Our view
The BoE have acheived their objective although at we still believe that the increases in base rate were not enough and, politics allowing, you will see another interest rate increase in the first half of 2005 before the market really settles.