Interest Rates Cut Put On Hold
The Bank of England has kept its base rate to 0.50 per cent, despite many analysts expecting it would be cut to 0.25 per cent in what would have been the first change in over seven years.
A cut was widely interpreted by industry commentators as a bid to bolster the housing market against what is expected to be a drop in transactions thanks to the economic uncertainty following the EU referendum.
This morning the Royal Institution of Chartered Surveyors released figures suggesting that since the EU Brexit vote, new buyer enquiries declined by 36 per cent, to the lowest level since mid-2008.
The biggest declines were in the south of England, with 58 per cent more surveyors in London seeing a decline rather than a rise in buyer interest. Most surveyors now expect that to be reflected in falling prices too.
However, there has also been a large-scale fall in stock available to buy.
Some see this as a silver lining though, because if supply contracts in the face of falling demand, prices should be underpinned, and interestingly 16% more contributors to the RICS survey reported prices to have risen rather than fallen over the last three months.
The Bank of England has stated that it will ease monetary policy in August....so we will wait and see what happens......