Home.co.uk
Home.co.uk

News: Homebuyers undeterred by rate rise

Britain’s homebuyers appear to have taken the MPC’s decision to raise interest rates by a quarter percent in their stride, according to Your Move Estate Agents’ up-to-date housing market activity data.

In a month that is traditionally quiet, gross sales rose 11% in August as compared with the same month of 2005. Over 143,100 purchasers agreed to buy a property in August, compared with just 129,200 last year.

On top of this, 1.6 million new buyers registered in August, compared with the previous year’s figure of just over 1 million, an increase of 62%.

David Newnes, managing director of Your Move Estate Agents, said: "The rate rise in early August caught many commentators on the hop and some were concerned about its potential impact on housing market confidence."

"The good news is that homebuyers appear not to have been spooked by the rise in borrowing costs. Indeed, we are seeing increased buying activity and increased interest from prospective purchasers through our network. Perhaps the early demise of the warm weather this year has made them turn their sights to finding a new home."

There has also been a pick-up in viewing activity by prospective buyers, with an average of 3.6 viewings per property on the market, up from 2.6 a year ago. This month’s figure is higher than that for June (3.1) and July 2006 (3.2).

David Newnes continued: "Viewings arranged by Your Move have been buoyant so far this year, with an average of 3.4 viewings per property. What is particularly encouraging is that there appears to be no real sign of a slowdown following the interest rate rise – indeed, August is proving to be an above average month, with viewing levels more than a third higher than this time last year."

"The sharp increase in buyer registrations was not matched by similar growth in properties coming onto the market, which declined slightly – by 0.2%. The result is that in our experience there are now more than 2.6 potential buyers for every property, the biggest imbalance we have seen for two years."

"Sellers seem to be sitting on their hands. There’s a serious shortage of homes for sale on the market which means that anyone considering selling should find a suitable buyer very easily."

"Notwithstanding the interest rate rise and recent publicity about the high level of consumer indebtedness, homeowners seem to be in a positive frame of mind. There was modest growth in mortgage applications in a month that in our experience is typically subdued, suggesting that borrowers remain confident but are taking a responsible attitude to credit."

Yorkshire saw the biggest rise in gross sales, up 33.4% year on year, followed by the East and West Midlands (up 15.1% and 13.5% respectively) and the South East (also 13.5%).

Sales were weaker in East Anglia and Scotland (down 18.0% and 11.5% respectively). However, viewings per property were strong in Scotland (7.8 per property on the market, compared with the national average of 3.6). Viewings were also high in London (8.9) and South East (4.5).

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