Housing developer calls for further interest rate cuts

A senior official from a major housing development company has stated that further interest rate cuts are required to help support the market, adding that house prices are likely to remain flat for the next year and a half.

The Chief Executive of Barratt Developments said that the next eighteen months in the housing sector could be rocky.

He said that whilst the situation had been eased somewhat by the two interest cuts that have already been applied to the base rate since December, further interest rate cuts were needed.

He added: ‘I am expecting something like flat prices for the full financial year, and I wouldn’t assume it would be very different in the next financial year. It depends on what happens in the markets.’

He also said: ‘The indications are fairly strong that we will see further interest rate reductions in the future and that can only help.’ Many industry experts have predicted that the base rate will be cut again before the summer and then again in the latter half of the year.

Following the most recent Monetary Policy Committee meeting the Bank of England left the base rate unchanged at 5.25%, and the governor of the central bank has said that rates may not fall as quickly or by as much as some industry officials are predicting.