The Financial Blog

Bank of England Monetary Policy Committee member and all round house pricing guru Kate Barker has spoken out about the current state of the UK housing market. 

While the UK housing market was deemed to be holding up well even though there is a global credit crunch affecting everything currently, the higher interest rates and lower house price rises are putting the buy-to-let markets at risk.

She said: “A potential source of weakness could be the buy-to-let market, given a combination of higher interest rates, little change in rents and possibly reduced expectations of price appreciation, a decline in this demand, even if existing buy-to-let owners do not decide to sell, could well dampen the market.”

As well as this Ms Barker commented that although house prices are above reasonable estimates which leaves them vulnerable to a major change that since there is no sharp rise in unemployment or decline in consumer confidence a major crash is unlikely.

So the takeaways for this analysis are that a major crash isn’t coming any time soon, however buy to let investors whould be wary and ensure they have the best possible mortgage rates to protect themselves from any dampening of the market.

This entry was posted on Wednesday, October 24th, 2007 at 12:17 pm and is filed under Mortgages. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.