Rate cuts
Written on December 28, 2007
The anticipated cuts to the base rate of interest will stabilise rather than re-igniting the market in 2008, according to the Nationwide building society.
The lender has published its latest house price index, showing that while prices dropped by 0.5 per cent in December, the annual increase for 2007 still stood at 4.8 per cent.
But landlords with Buy to Let Mortgages are set to experience a more subdued environment next year even if the Bank of England does act swiftly, Nationwide has suggested.
“It is likely to take more clarity about the extent of losses in the US sub-prime mortgage sector for conditions to fully return to normal,” added Fionnuala Earley, chief economist at Nationwide payday loans.
“The speed and extent of this normalisation process will be one of the main factors to watch in 2008,” continued Ms Earley.
The Bank of England is expected to cut rates at least twice more next year in order to offset the effects of the credit crunch.
Sourse