According to the Royal Institution of Chartered Surveyors (RICS) the recent interest rate increases has had the desired effect of slowing down the housing market in the UK.
In a survey of its members, RICS found that 37 per cent more chartered surveyors reported a rise than fall in house prices in December, but at a slower pace than in September.
RICS said that the overall market is "firm", supported by a "booming City economy". But it admits that house price growth in London is not decelerating.
The trade association's spokesman Ian Perry said, "Interest rate rises have started to cool the housing market and last week's rise will have a further impact in the coming months, but the market remains strong. However, the rate rise will do nothing to aid home owners struggling with affordability conditions with more repossessions looming on the horizon."
Speaking ahead of today's news that retail price index inflation rose to 4.4 per cent in December, Mr Perry added, "As we move further into the new year, consumers will begin to tighten their belts as finances come under pressure but rising wages and employment will continue to boost the economy and RICS expects interest rates to finish at 5.5 per cent by year end."
Michael Coogan, director general of the Council of Mortgage Lenders, recently said that the organisation would "not be surprised" if interest rates reached 5.5 per cent by the end of 2007.
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Surveyors see house prices cooling
Fri, 19 Jan 2007
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