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"But they are by no means yet approaching the levels of activity seen in 2004."
Hometrack’s monthly report for March showed house prices rising by 0.5 per cent on average nationally, with
It said the market was being driven by a revival in house prices in
“A resurgent market in
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Mr Archer also took a more measured view. “While the February mortgage lending and approval data are still relatively healthy overall, there are hints that housing market activity could be starting to lose momentum after several months of improvement,” he said.
“The data reinforce our suspicion that house prices will be unable to sustain sharp gains for an extended period.
“We believe that the upside for house prices over the longer term will be constrained by affordability constraints, elevated debt levels, moderate earnings growth and a weaker labour market. First-time buyers will be particularly squeezed.”
It is increasingly beginning to look as if the Chancellor’s decision last week in the Budget to increase the stamp duty threshold by just £5,000, to £125,000, was calculated so as not to re-ignite the rampant inflation in the housing market seen in 2003-2004. Mr Archer suggests that for the same reason, it is increasingly unlikely that the Bank of England will cut interest rates before August.
Of other borrowing data issued today, unsecured consumer borrowing was relatively subdued by recent past norms in February, as consumers continue to temper the use of the credit cards.
Record high debt levels, rising unemployment and heightened pension concerns means that an increasing number of consumers are under pressure to improve their balance sheets, which is likely to be further bad news for retailers.
