RICS says rate rise will help to cool housing market

The Royal Instiutution of Chartered Surveyors welcomes the Bank of England’s decision to raise interest rates by 1/4% to 5.0%.

Milan Khatri, RICS chief economist, says: “By acting in a timely manner, the modest rise in interest rates will help to cool the housing market but at the same time promote wider economic stability and prevent inflation pressures building.

“House price figures from the Halifax confirm that the market has shrugged-off the August interest rate hike with property price inflation at close to a double digit pace (for the year to October prices rose 9.7%), more than twice that of wages.

“Today’s interest rate rise, together with possibly one more in early 2007, should help to produce a “soft-landing” for the housing market, giving rise to a more stable market environment for buyers.”