It’s been a tough summer for the housing market with little improvement since the Bank of England interest rate reduction in early August. It seems further rate reductions are required to encourage more buyers, particularly first-time buyers to enter the market. Chains are not being generated whilst buyers stand on the side lines.
It doesn’t feel like people are fearful of buying a property, it is more a case that they are still concerned about the economy and world events which have weakened confidence. Without confidence the housing market will continue to slowly struggle. The vast number of properties for sale are hampering chances of selling and the incentives offered by the house new builders are difficult for most sellers to compete with.
September normally signals the end of the holiday season with children returning to schools and normal routine resuming. Traditionally, activity picks up as many attempt to move before Christmas. This year we need another interest rate reduction to overcome the lack of confidence the country is experiencing. There will be a point when the cost of borrowing becomes attractive enough to entice house movers to become more active again and now is the right time.
The housing market has shown great resilience over the last few years with radical changes, normally triggered by political decisions; the next few weeks will be a testing time, so another interest rate reduction will be welcome so activity can return through September to help end the year positively.