Various factors weighing on housing market activity

Interest rates are expected to remain at their record lows until 2019, according to recent forecasts, the Governor of the Bank of England, Mark Carney, was recently reported as saying “an unforgiving global environment was likely to keep rates at a record low of 0.5pc for longer than previously expected”.

With the average mortgage loan-to-income ratio now at a record high, the case for increasing interest rates to discourage households from accumulating debts they may struggle to repay continues to strengthen.

Following fresh economic gloom earlier this year the money markets now imply that the first interest rate increase will come in August 2019. In recent months fixed and variable buy-to-let mortgage rates have reached new lows.

According to the Office for National Statistics, net lending secured on dwellings increased by £3.7bn to hit £1.281trn, in-line with economists´forecasts, mortgage approvals increased by 74,581 in January  to a two-year high,  reaching £13.9bn in value

Buy-to-let investors are seen trying to complete their transactions before  the expected hike in Stamp Duty in April, as much as this would exert pressure on stock levels and force prices further upwards, the upcoming referendum on continued EU membership was seen by some economists as a potential major downside risk to activity levels in the housing market.


Allen Walkey

Highly experienced businessman with a successful career in property sales and investment both in the UK and abroad. Now a freelance writer and blogger for the property and Investment Industry, keeping readers up-to-date with changes and events in a rapidly changing world.

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