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Mortgage rates must be kept low for housing market recovery – Rightmove

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  • 20/04/2020
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Mortgage rates must be kept low for housing market recovery – Rightmove
Mortgage lenders need to continue offering low interest rates so borrowing can remain affordable and the housing market can recover once the lockdown ends, Rightmove has said in its April house price index.

 

Lenders should also not rush to repossess properties from those who are in arrears, as putting these homes back on the market en masse would result in prices being driven down. 

The property portal said after the lockdown, the housing market must put a plan in place to maintain social distancing and adapt for a “new-found caution” among buyers and sellers.  

It also suggested government incentives be introduced such as stamp duty holidays, the extension of Help to Buy and the encouragement of mortgage lending. 

Miles Shipside (pictured), director and housing market analyst at Rightmove, said: “Owners need to be encouraged to move by reducing the costs of moving, and prospective buyers encouraged to buy by reducing the costs of funding their purchase. 

“Given the government’s interventionist strategy to date that might include encouragement for lenders to resume business as usual with their full range of products when it’s safe to do so.”  

“We need to avoid a repeat of the post-credit crunch mortgage famine which took from 2008 until the 2013 launch of Help to Buy to bring the mass market back into play with low-deposit mortgages,” he added. 

 

Pre-lockdown figures show housing market bounceback 

According to Rightmove figures, the housing market was experiencing its best start to the year since 2016 as the number of sales agreed rose 11 per cent in the year to 23 March the day the UK officially entered a lockdown.

In the reporting period from 8 March to 11 April, the average property asking price dropped by 0.2 per cent to £311,950 and annually, house prices rose by 2.1 per cent. 

However, the estate agency said due to the lockdown and pause of activities in the housing market, the statistics for April were “not meaningful”.  

Housing stock has fallen slightly by 2.6 per cent but Rightmove said the amount of fall-throughs were typical of the time of year, suggesting buyers and sellers are carrying on with transactions as usual. 

Shipside added: “Agents report that there is good co-operation, with both buyers and sellers keen to hold deals together.

“While some buyers may express concern over the possibility of short-term dips in house prices, many are taking the longer-term view and living up to their commitments to proceed.” 

 

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