The Nationwide Building Society’s chief economist has suggested we are witnessing the ‘turning of a corner’ for the housing market whilst speculating that interest rates are likely to stay on hold until late 2015.
However, he also issued a warning for the market not to get too carried away, pointing out that despite a stronger economic recovery than expected, growth remains low by historic standards.
Speaking at the inaugural Financial Services Expo (FSE) in the AMI-IMLA seminar theatre, Robert Gardner expressed his relief that, on the back of solid data for the third quarter, there was growing evidence for the industry to be increasingly upbeat about the UK housing market and economy in general.
When reflecting on potential interest rate movement, Gardner said: “As it currently stands interest rates are likely to stay on hold a little longer than initially thought and we forecast that any rise could well be held back until late 2015.”
He explained that a big influencing factor in any potential rate rise was the hitting of the 7% unemployment threshold, adding: “There is some uncertainly amongst economists regarding how and when this threshold will be reached. As it stands it’s difficult to be sure as there are many influencing factors and even though this target could well prove to be the tipping point, it should not be considered as an immediate trigger for an interest rate rise.”
