Milan Khatri, chief economist, RICS The housing market is gradually pulling out of the slowdown that became apparent in mid-2004, with chartered surveyors reporting that the decline has slowed. While there are disagreements over the exact direction of prices in the past 12 months, it is clear that activity and demand are picking up. Chartered surveyors saw more buyers in the market over the summer, particularly since the August interest rate cut.
Bank of England f igures show the number of mortgages approved for house purchases hit a 14-month high in August, back above the average in the past decade.
The lack of a major price correction may disappoint would be f irst-time buyers, who still find prices too high, but the relative stability of the market compared to the early 1990s is unsurprising given that the economy continues to grow at a modest pace and employment levels are still rising to record highs. Unless the economy suffers a signif icant shock, or interest rates rise sharply, the prospect for the housing market in the next year is for stable activity and a return to very modest price rises.
Irum Malik, economic & policy director, ACE Looking at the construction sector from the viewpoint of consultancy and engineering reveals a market of strong growth with a positive outlook. ACE's Summer State of Business survey found about a third of f irms expecting annual growth of above 5 per cent over the coming three years. The survey also showed that, while the doubling of crude oil prices over the past three years has caused concern, it has led to increasing investment and helped place the oil/steel/coal sector at the top of the growth league.
Meanwhile, the pressure to reduce emissions in the Kyoto agreement has provided impetus to both the gas sector and investment in alternative energy sources. Other notable growth for ACE members is coming from rail and telecoms clients, while the private housing sector, which forms the biggest sector for ACE firms, is also seen as buoyant. Looking at the survey overall, there appear to be strong prospects in the pipeline for construction.