First time buyers could see July rate fears ease

18-Jun-2007

A series of economic indicators released this week could show muted activity, it has been advised, and hence ease first time buyer fears that a further interest rate rise is set to take place in July.

Economists at Global Insight have advised that forthcoming mortgage approvals data could provide evidence that the housing market is "coming off the boil", while consumer borrowing is also expected to be "muted".

Many homeowners are already overreaching in an effort to get onto the housing ladder, the economists have predicted, making further rises unnecessary.

Such findings back up Lloyds TSB's latest Business Barometer, which has reported a significant drop in economic confidence over the past month.

"With May's CPI inflation data weaker than expected, it may be that the one per cent rise in rates since last August has done the job and rates may not need to rise further," commented Lloyds TSB chief economist Trevor Williams.

To find out about the different ways of financing a first home, see our section ‘Affording Your First Home’.

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