The director of a Cumbrian property company today said widespread panic spread about the UK housing market was ‘way wide of the mark’.

Nicky Gordon, Managing Director of Genesis Homes, has been ‘buoyed’ by recent reports of house prices remaining stable amidst a fear that asking prices would be slashed to tempt buyers, while lenders have also started to reduce interest rates on mortgages to encourage movement in the market.

Nicky said: “Widespread fear has been sparked by the doom and gloom predicted for consumers, particularly those buying and selling houses, through the increase of interest rates and the possibility of house prices falling significantly.

“The reality of the situation is that interest rates are at an acceptable level of between 4.5-5.5%, which is the circa 70-year average that we should expect, and we have basically been spoiled for a number of years with interest rates being basically zero. We enjoyed it but we need to realise it couldn’t last forever.

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The housing industry has taken further encouragement from words from the Bank of England governor Andrew Bailey who claimed that base rate increase expectations needed to fall even further.

Nicky said: “This is further indication that the economic ‘disaster’ forecast by mainly tabloid doom mongers may have been blown out of all proportion, and that there are plans and expectations in place to help the economy return to some sort of stability.”

This week a lender became the first in more than a month to offer a five-year fixed-rate mortgage at under 5%.

The news coincided with online property agents Rightmove revealing that the average asking price of a house on the market has fallen by just 1.1% - which Nicky suggests is in line with usual pre-Covid falls in the run-up to Christmas.

He said: “Historically, before the days of Covid-19, the market slows in the winter months and those needing to sell will accept a slightly reduced amount, before a rise at the turn of the year when consumers approach a new year with added vigour for house buying and lifestyle changes.

“It will be interesting to see in the new year that we have returned to pre-Covid normality and the housing market remains on sound footing. I fully expect this to be the case.”

 

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