No market improvement forecast from BBA and Rics

Posted: 01 Dec 2008 11:23:39 GMT

The British Bankers Association (BBA) has insisted that house prices are not showing any sign of improvement for 2009 as the potential freezing of the mortgage market could lead to transaction figures dropping dramatically.

According to the BBA, the money markets on which the banks rely to provide mortgages will be the cause of the mortgage freeze next year, creating even lower prices.

The Royal Institute of Chartered Surveyors (Rics) has even gone as far as to suggest that a drop in the Bank of England base rates next month would make little difference to house prices in 2009.

Simon Rubinsohn, chief economist at Rics, said: "Rics expects a further cut in base rates next week.

"The real issue for the property market remains the collapse in transactions rather than the necessary adjustment in prices with the collapse in MFI being the latest evidence of the spill over from the dearth in home sales to the high street."

With so many problems affecting the housing market, renting is growing in popularity.

Those hoping to make a return on the property market without buying could instead invest in a rental property.

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