Wed 4 Jun 2008
Rate cut essential to save industry says HBF
The Bank of England must cut interest rates tomorrow by 0.5% to revive the housebuilding industry, says the HBF.The industry body argues that in the three post-World War II slumps that have dogged the housing market, high interest rates and economic recession ground buying to a halt. Today, the market slowdown is driven primarily by a halving in mortgage availability, which risks plunging the economy further into decline unless the issue is addressed tomorrow, the HBF maintains.
“Previous economic crises have led to housing market slumps,” said John Stewart, the HBF’s director of economic affairs. “But this time the cart is leading the horse, with the speed and depth of a downturn threatening a serious wider economic crisis. We can’t rely on lessons learnt and solutions based on past downturns as this is a completely new situation.”
Quarterly mortgage approvals have now fallen 43% since their peak at the end of 2006, a significantly higher figure than in the last housing slump, in which approvals fell by 32% between 1988 and 1992.
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