King’s Comments ‘Not Helpful’

Mervyn King?s negative predictions have not helped the property market in recent months, as prices continue to fall across the country, the Royal Institute of Chartered Surveyors (RICS) has reported. The market is declining at its fastest rate in 12 years, RICS said, with 41% more chartered surveyors reporting price falls over the past month than price rises, 12% more than in September. RICS blamed the falls not only on the recent interest rate rises, but also on negative comments made by Mervyn King, the Governor of the Bank of England, earlier this year and at the Monetary Policy Committee last week, as well as the ?additional uncertainty? injected into the market by continued media speculation. Commenting on King?s predictions, RICS spokesman Jeremy Leaf said: ?Mervyn King?s comments did have some effect, because when he speaks, people tend to listen, which is not always that helpful. His prophecies can be self-fulfilling.? Last week Mervyn King warned that there would be ?modest? price falls over coming months as the property market cools down. RICS is optimistic that the market will stabilise, because surveyors in London market, usually a reliable barometer for the rest of the UK, have reported a levelling off in prices, which may be an early signal that declines are coming to an end. ?The professionals on the ground believe that confidence will not deteriorate further over the coming months as the underlying factors, jobs and the wider economy, remain stable,? said Mr Leaf.