News: Credit crunch will just be short term blip

Fri, 21 Sep 07

The credit crunch will have a minimal short term impact on the housing market, with estate agencies experiencing business as usual, claims haart...

Paul Smith, chief executive of haart, comments: “While the current credit crunch and its effect on major banks and lenders is certainly concerning, homebuyers looking to move will not be put off and we have not yet witnessed a drop in activity in our estate agency branches.”

“However, we believe that the Bank of England should now consider reversing the latest interest rate rise, which many felt was unnecessary, as a reduction now would surely bring calm and a much needed renewed confidence.”

House prices levelling off

House prices have already begun to level off in many areas and this trend is set to continue more universally in light of the credit crunch, which will force other companies to adjust their lending criteria.

Paul Smith continues: “The largest impact is likely to be felt by borrowers with higher loan to value mortgages, secured at higher rates. As always, first time buyers in particular will struggle and will need to rely increasingly on assistance from family members to get onto the ladder.”

“The housing market usually slows from mid October as the festive season starts to kick in and we feel this may be brought forward to late September as a combined result of the lending uncertainty and the HIPs confusion.”

Smith added: “However, with demand still exceeding supply, market activity is unlikely to see too much of a drop, although vendors will need to be realistic regarding their price expectations, especially if they want to move before Christmas.”

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