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Lower interest rates sparks interest in property market

March 14, 2009 by admin  
Filed under News, News-Mortgages

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According to a recent report the dramatic drop in interest rates that has taken place over recent months has resulted in renewed interest in the housing market from would be buyers.

The base interest rate has been cut from 5 percent last October to just 1 percent by February, following a series of base rate cuts. This has taken the base rate to the lowest level in the three hundred and fifteen year history of the Bank of England.

However, although buyers are making increased enquiries with regards to properties estate agents have reported that the actual level of sales is still very low, which indicates that the majority of enquiries are not converting into property sales.

There are a number of reasons for this according to industry officials, and this includes buyers hoping that house prices will fall further before taking the plunge and also the lack of mortgage availability for groups such as first time buyers.

Officials from the Royal Institute of Chartered Surveyors have said that this is the third consecutive month in which buyer enquiries with regards to properties have risen. They added that the combination of lower house prices and plummeting interest rates was generating increased interest amongst potential buyers with regards to the property market, but that the mortgage drought was preventing these enquiries from turning into sales.

RICS stated: ‘The latest survey provides further evidence of the eagerness of buyers to try and pick up bargains. This interest has yet to translate into sales but transactions may pick up in the coming months if the government follows through on its recent announcement and introduces guarantees for the issuance of residential mortgage backed securities. The latest cut in interest rates may improve confidence for those on the margins, encouraging buyers looking for more attractive finance deals.’

Tags: low interest rates, time buyers, margins, rates, property market, year

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Comments

2 Responses to “Lower interest rates sparks interest in property market”
  1. Jamry says:
    March 14, 2009 at 9:02 pm

    I agree that lower interest rates and the Bank of England’s policy of Quantitative Easing will stimulate the market. I believe that there is a great window of opportunity within the next 6-9 months to purchase properties at the bottom of the cycle.

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  1. RICS states property sales levels may rise says:
    April 3, 2009 at 8:09 am

    [...] RICS has also pointed out that whilst it is hoped that this renewed interest in property purchases will eventually turn into actual sales, for the moment the increase is simply based on enquiries [...]



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