A Building Society Association survey has shown that the majority of building society bosses are predicting house price growth will continue to exceed inflation and believe that house price rises will be around 4 - 5% this year. Most society chief executives think that the housing market will remain buoyant, with 89% saying that they expect to do either the same or more lending this year, compared with only 48% last year. Forty per cent have predicted that interest rates will remain at 4.5% by the end of the year, while another 30% believe that they will rise to 4.75%.
Our view
If property starts to 'hot up' expect interest rate increases towards the back end of the summer.