Britons pessimistic over mortgage rates

22 December 2006
Four out of five Britons predict that mortgage rates will rise in the short term future, a report from Lloyds TSB Corporate Markets' Consumer Barometer finds.

Only four per cent of people surveyed anticipated that rates would fall, the lowest number since the barometer began in November 2004, suggesting that UK consumers are now more gloomy about the housing market than at any time in the last two years.

Trevor Williams, chief economist at Lloyds TSB Corporate Markets, said: "Rate rises in recent months have obviously dampened consumer optimism and despite the bank rate holding at five per cent this month, consumers are expecting the gloom to continue well into 2007."

But consumer pessimism about mortgage rates has not impacted on buying behaviour, he argued: "Perversely [this] does not seem to have quashed the insatiable drive that continues to buoy the housing market."

The Royal Institute of Chartered Surveyors this week reported that 47 per cent of its members had reported house prices rose in November, in spite of the interest rate hike.

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