House prices at record high despite predictions

Asking prices for homes hit a record high in England and Wales this month. House price inflation also rose, despite many people in the housing industry expecting a significant fall.

The survey by the property website Rightmove goes against predictions from economists of a 10% fall in house prices this year. Bank of England policymaker David Blanchflower even warned that prices could fall by about a third unless immediate action is taken.

However, some economists are claiming that the Rightmove survey is skewed, because homeowners are being unrealistic when setting asking prices.

Paul Robson, currency strategist at RBS Global Banking said: “The Rightmove data has been largely discounted because consumers can ask what they want for their houses but it doesn’t mean they will get that.

“The economic reality suggests that the UK housing market is going to slow.”

It is unlikely that interest rates will be cut from the current 5%, as levels of inflation are a cause for concern.

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