UK earnings growth predicted to encourage more homebuyers

Our recent house price index showed that house price growth for the year to date remained relatively measured and will continue to be so. On a national basis, we expect the final figure for house price growth in 2005 to be about -2%. The Bank of England Base Rate cut in August is expected to help underpin the market, keeping mortgage repayments in line with historical averages as a percentage of salary. We predicted that the Bank of England Base Rate would finish the year at 4.25%, and with many indicators suggesting there might be a further reduction we still expect this to be the case...