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Estate agent body hopeful of swift property market recovery in UK

The National Association of Estate Agents believes that 2009 could be the year when house prices start to bounce back.

Chief executive, Peter Bolton King said that the sharp decline in prices was unprecedented. 'It seems possible to me that once the recovery begins, we could see a bounce as pronounced as the fall,' he predicted.

He claimed three things were needed if the property sector was to return to the strength witnessed in 2007. Most important is that lenders make finance available to first-time buyers.

Then he called for a further cut in interest rates by the Bank of England's monetary policy committee when it meets next Thursdays and finally consumers needed to regain their confidence in the ailing market.

However the news published today that Nationwide, Britain's biggest building society, will not pass on any further cuts to the Bank of England base rate to customers with tracker mortgages is not likely to inspire confidence in the property market.

The decision flies in the face of Government policy and repeated calls from Chancellor Alistair Darling for lenders to pass on cuts.

Nationwide plans to invoke a rule in its mortgage contracts allowing it to freeze tracker rates when the base rate falls below 2%, affecting more than 200,000 customers.

The Bank of England's Monetary Policy Committee is expected to announce a cut of half a percentage point next week. That would save homeowners on a £150,000 interest-only tracker deal about £60 a month.

But Nationwide defended its decision. 'We have to balance the interests of our 1.4 million borrowers with the interests of our 10 million savers and so we will set a floor of 2% on our trackers, whatever the Bank of England may say next week,' a spokesman said.