Housing market remains stable
The recent interest rate hike has caused much muttering and a certain amount of pessimism from all those concerned with the housing market. However, many experts are saying that we don’t need to tighten our belts just yet. ‘This rise in interest rates will not have a huge effect on the current housing market and borrowing,’ says Peter Brodnicki, chief executive of Mortgage Advice Bureau. ‘This is the first interest rate increase in the cost of borrowing for almost four years, and with the rate at a 48-year low this 0.25 per cent increase will not really affect the public, who were largely expecting this increase anyway and have benefited from the low rate for longer than originally anticipated.
‘I expect a slight increase in remortgaging as borrowers consolidate their debts, but it will not curb consumer spending, which would only be affected by an increase of over one per cent. However, with economic prospects continuing to improve, further interest rate increases will occur next year. Homeowners not benefiting from discounted or long-term fixed rates will continue to remortgage to find the most competitive deal.’
House prices continue to rise
In response to the ODPM's housing market index issued this month, which claims that house prices are rising by 10.9 per cent (in September) and that house prices are slowing, Knight Frank’s head of Residential Research Fiona Sadek comments, ‘The Knight Frank housing index shows that house prices have risen by 3.4 per cent over the last quarter and we have seen a significant increase in sales during this period. However, we have noticed that there are considerably fewer properties coming onto the market. As long as homes are realistically priced they are selling relatively quickly, especially at the top end. As long as there are no nasty shocks, the market is relatively well balanced and I see no reason why this shouldn't continue.’
No to Home Information Packs say agents
A survey of National Association of Estate Agent (NAEA) members has found that the vast majority of the UK’s leading estate agencies overwhelmingly support the critical findings of the Housing, Planning, Local Government and the Regions Committee on the Draft Housing Bill. In its response the housing minster Keith Hill says they will accept ‘unconditionally a number of recommendations and undertake to consider more.’
The minister chose not to elaborate when he made his response to the Select Committee, but reiterated that the government will press ahead with the introduction of Home Information Packs (HIPs) which he claims will make the buying/selling process more certain, transparent and consumer-friendly. The NAEA cannot agree on a number of points, for instance that the introduction of HIPs (as Sellers Packs are now called) could seriously slow the market, because each seller will now have to find at least £600 to compile a pack.
Besides this, nearly 80 per cent of buyers do not bother with a survey, choosing to rely on the valuation of their lender, but under the Housing Bill they must have a Home Condition Report. These and many other issues have been raised as points of concern by the NAEA, whose president Melfyn Williams commented, ‘The NAEA is disappointed that despite widespread industry concerns the government appears to remain committed to introducing further red tape bureaucracy and additional cost into the home buying process. While this legislation may suit the government’s agenda it does not suit the UK’s home owning public.’