Increase in borrower confidence sparks house sale boom
The recent cut in the Bank of England interest rates is credited with increasing borrower confidence, resulting in a property sales boom in August.
A report issued by rightmove.co.uk credits a combination of favourable interest rates on mortgages, and realistic pricing by sellers for luring buyers back into the housing market.
Despite being the third consecutive month of increased buying activity, August sales figures outstrip the previous two months, and surprised industry experts now consider the housing market to have turned a corner.
Commercial director of rightmove.co.uk, Miles Shipside, observed: ìIt has taken the last three months of more realistic and affordable pricing for sales volumes to start to recover.
ìWe could be at the bottom of this cycle of the property market, though continued realistic pricing is critical to keep the momentum going.”
The mortgage lender Halifax, in a separate report, claims that house prices increased fourfold in August compared to the previous month.
Halifax attributes the rise to the cut in interest rates from 4.75 per cent to 4.5 per cent, calling the rise in prices ìconsistent with a pattern established when the Bank of England implemented the first interest rate reductions during the two previous rate cuts since 1997″.
The rightmove.co.uk report refutes Halifaxís analysis of the house price rise, stating that the recorded rise in prices is due to sales occurring before the rate cut, and is therefore not a direct result of interest rate reductions.
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