Estate agency group Spicerhaart says today's rate rise will cool the housing market and damage confidence.
Russell Jervis, managing director at Spicerhaart, says: “This interest rate rise, if its hidden aim was to cool the housing market, is superfluous. Our current figures show that since the last rate rise the market has definitely cooled. New buyer applicants are down 18% in the first quarter of 2004.
“Property is staying on the market longer and the average selling time has moved from four to six weeks. Asking prices are not being achieved in the same percentages they were in quarter one. These will soon feed through to lower reported house price rises over the coming months.
He adds: “We are entering a cooling off period and the combination of football fever with the forthcoming Euro 2004 will also deter house hunters. The rate rise in May has had an effect and this rise is in danger of damaging confidence.”