UK real estate agents have registered an 11 percent increase in buyers in June, due to an increasing number of low mortgage deals and more reasonable asking prices from home sellers, according to a report from property analysts Hometrack.
It added that sales will continue to increase this summer, as interest rates are kept low and lenders continue to bring out cheap mortgage transactions.
Despite the rise in inflation, the Bank of England kept the base rate at 0.5 percent for the 27th consecutive month at its June meeting and lenders have already ventured into mortgage cost-cutting, as the threat of rate increases fades.
There have even been forecasts of interest rates remaining low until 2014, a move expected to further increase demand and enhance the real estate market.
“Earlier this year the market expected a base rate rise around May and mortgage rates started to rise. Now any rise looks a way off and a number of lenders are clambering over each other to offer the best deals,” said Michelle Slade, an analyst from Moneyfacts.
“So much so that average fixed and tracker mortgages rates have hit their lowest level since Moneyfacts began recording rates in 1988.”
“This combination of competitively priced mortgages and properties being advertised at more realistic levels has given a much needed boost to the property market.”
“Not only that, but the longer base rate remains at 0.5 percent the more likely home buyers and sellers could see mortgage rates fall further.”
Meanwhile, Richard Donnell, Director of Research at Hometrack, said, “The first six months of 2011 have seen the housing market holding up better than many had expected.“
“Low transaction volumes, low mortgage rates and forbearance by lenders limiting the number of forced sales have all played their part.”
“While average prices have slipped back by 0.1 one per cent in June, sales volumes have increased off the back of higher demand and greater realism over achievable prices on behalf of sellers.”
“With estate agents keen to maintain sales volumes to support revenue, the improvement comes as welcome news in the face of the traditional seasonal slowdown.”
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