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Bovis makes plea for interest rates cut

Housebuilder Bovis Homes is pleading with the Bank of England to make further interest rate cuts and reduce the cost of home loans in order to stimulate the market.

The Bank's Monetary Policy Committee voted to keep the base rate of interest at 5.25 per cent this month

However, the company said that further cuts was the only way the housing market is going to emerge from the current "weak cycle", the Telegraph reports.

Bovis chief executive Malcolm Harris told the paper: "For the year as a whole, unless decisive action is taken now to reduce interest rates and more normal conditions return to the mortgage market, it is likely that volumes will be well below those achieved in 2007."

However, last week the Chancellor Alistair Darling said that, while prices have declined slightly in recent months, the strong position of the property market will make a downturn unlikely.

Sharp falls in prices could lead to homeowners suffering from negative equity - making moving house and remortgaging very difficult.

Mr Darling said: "I believe the housing market in this country, although it will slow down, is fundamentally strong," he added.

"It's true that house prices are slowing down, but this is on the back of many years when house prices have been growing at ten per cent or even more in some parts of the country for many years."

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