Further rate cuts could ease the pressure on mortgage holders next year, one sector body notes.

The Royal Institution of Chartered Surveyors (Rics) asserts that the short-term effects of the credit crunch on mortgage loan borrowers could be dissipated next year if widely-predicted further rate cuts are implemented.

Simon Rubinsohn, chief economist at Rics, says that although mortgage loan criteria may be tightening, December's base rate cut is a sign of positive new year trends for first-time buyers.

Mr Rubinsohn voices Rics' prediction that base rates are to be lowered by at least another 0.5 per cent by the middle of 2008.

"This will provide an important layer of support for the housing market, helping to offset the threat posed by the increase in mortgage outlays as the resets for up to 1.4 million homeowners fall due," he claims.

According to the Council of Mortgage Lenders, gross mortgage loan approvals declined by eight per cent to £30.7 billion in November.
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