Renting still prudent as recession could be imminent |
17 2008 |
| The housing market could be in for more punishment as the UK is hurtling towards a two-year recession, according to a leading fund manager. Renting has become an increasingly prudent option of late as first-time buyers are turned away from the market by increasing mortgage arrears and fees, tumbling prices and the lowest transaction rates since 1978. Now Ted Scott, of F & C Investments, has claimed that after a turbulent few months the trend looks set to continue, with rising inflation placing further pressure on beleaguered homeowners. He told FT Adviser website: "Usually recessions last around 18 months and we haven't entered into recessionary territory yet. "Bond markets are now effectively saying that they expect inflation to go up to 3.5 or 4 per cent and that's bad news. "The credit crunch is spreading out into the wider economy and the outlook will remain challenging." Many commentators are predicting inflation will rise to 3.1 per cent or higher when the latest figure is announced on Tuesday (June 17th), meaning governor Mervyn King will have to write an explanatory letter to the chancellor.  |
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