6 Feb

Interest rate cut needed to boost homeowners' confidence

Interest rate cut needed to boost homeowners' confidence

The housing market is to set recover imminently but still requires a cut in the interest rate to stimulate consumer confidence, according to one of the UK’s largest construction companies.

Analysts have widely predicted that the Bank will trim interest rates by 0.25 per cent tomorrow.

According to Chris Coates, managing director of Galliford Try Homes, such a move would hasten the recovery of the housing market and restore battered confidence among homeowners in the short-term.

He said: "While the housing market is set for a recovery, an imminent rate cut is needed to increase consumer confidence and property sales.

"The economy is on track and all the indicators are showing the financial squeeze on consumers is short term and overall demand for housing will continue to outstrip supply, especially in the south-east."

Mr Coates added: "The general feeling is that interest rates are on their way down this year and by initiating a cut now, homebuyers and industry will move forward in 2008 with renewed confidence."

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