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The UK housing market remains a long way from overheating - Says Jones Lang LaSalle in reaction to Bank of England’s February Inflation Report released today

London, 12th February - The Bank of England today released the February Inflation Report, notably reaffirming its commitment to deliver price stability, but to do so in a way that avoids undesirable volatility in output by continuing the record low base rate for the medium term. Low inflation expectations are the key factor that has allowed the Bank of England the flexibility to extend this unprecedented stance on rates.

A further statement was made on the state of the nation’s housing market. Governor Mark Carney noted that while risks of strong price growth in the housing market were worth monitoring, the UK housing market remains a long way from overheating. As such, Government supports for the housing market - notably Help to Buy - should be maintained.
Adam Challis, Head of Residential Research at Jones Lang LaSalle notes: “The housing market has been shocked back to life over the past year. We have always been clear that activity in the spring selling season would be the key factor that would determine whether the recent rate of price growth would moderate. Early indications are that supply from would-be sellers is increasing, flowing through to activity.”

Recent figures from Lloyds show that the volume of transactions increased by 21% between April and September 2013 compared with the same period in 2012, with Capital Economics predicting 260,000 extra transactions this year. 

Challis adds: “Improving transaction volumes mean the housing market logjam may finally be breaking, bringing some liquidity back to the market and moderating price pressure.

“Government deserves some credit here for sticking to a bold plan that appears to have worked.”