Howard Archer House Quotations

We believe house price increases will be relatively muted over the coming months, given affordability constraints, increased debt levels and muted earnings growth.

Activity is benefiting from August's interest rate cut, increasing confidence in the housing market and still rising employment. This is likely to put a floor under house prices.

December survey evidence showing robust service sector activity, stronger retail sales and firmer house prices has temporarily at least alleviated some concern over the economy's softness and eased pressure on the MPC for an imminent cut in interest rates.

This increased housing market activity has clearly led to some recent firming in house prices, and there is undeniably a risk that prices could move sharply higher over the coming months.

There is undeniably a growing risk that house prices could move markedly higher over the coming months. Indeed, this risk is clearly showing more prominently on the Bank of England's radar.

The Nationwide data provides support for our long-held view that house prices will be unable to sustain sharp gains for some time to come.

House prices are likely to remain relatively flat for an extended period,

If house prices start to accelerate markedly, we believe buyer interest will diminish, thereby keeping a lid on prices.

For now at least, the Bank of England will be very wary that a trimming of interest rates could excessively stimulate the housing market and risk sending house prices markedly higher. It certainly further rules out a move today.

This is likely to put a floor under house prices, but we remain highly doubtful that house prices will move substantially higher on a sustained basis any time soon. If house prices start to accelerate markedly, we believe buyer interest will soon diminish, thereby keeping a lid on prices.

The climb in annual house price inflation to 2.5 per cent in November from a nine-year low of 1.8 per cent in October reported by the ODPM adds to the recent evidence that house prices have firmed to a limited degree recently amid stronger housing market activity and increased buyer interest.

The limited correction in the Halifax house price index in January following the marked rises during the latter months of 2005 reinforces our strong doubts that house prices will see sustained sharp rises over the coming months.