The National Association of Estate Agents is advising the Bank of England against increasing interest rates further in November, when a further quarter per cent rise is expected to take rates to 5%.
The October Monetary Policy Committee minutes, provide a strong indication that the committee will almost certainly vote in favour of the increase when they meet again next week.
Peter Bolton King, chief executive of the NAEA, says: The residential housing market on the whole has performed well in 2006. However I would ask the Bank of England to remember that the market differs significantly throughout the UK, with some areas of the country seeing a slower housing market whilst London, the South-East and East Anglia are performing particularly well. A further rate rise could have a detrimental effect on the areas that are already looking slightly flat.
Both the NAEA September housing market report and the Council of Mortgage Lenders September figures showed a slight slowdown in the market since the August rate increase. The market, it appears was buoyant enough to absorb the rise without too drastic an effect, and from all reports the market is still in good shape. However their has to be doubt as to whether a further rate rise will be absorbed with the same confidence, and therefore ask the MPC to consider this carefully before they cast their vote