Estate agents are not expecting an increase in property sales despite today’s interest rate cut, Napier Dunedin News can reveal.
The Bank of England today cut its interest rate by 3% to 2%, taking it to the lowest level in over half a century. This reduction, coupled with the 14.9% fall in house prices in the past year, is not met with particular optimism from estate agents.
Pam Kennedy at Lindsay Residential says things will get worse before they improve, with financial consultants predicting the overall house prices could drop to 30% next year.
“The interest cut won’t change much, as people are still nervous. The fear of losing their job combined with the threat of repossession means potential buyers are holding back. People dont feel safe buying in the current climate.”, Pam Kennedy told Dunedin Napier News.
As of December 1st, every homeowner is required by law to hold a Housing package before putting their home on the market. At a cost of £500-800 it is putting off potential sellers and thus slowing down the market.
The cost of the housing pack is resulting in many owners opting to lease the property instead.
Kennedy said: “In addition to the house pack, home owners now require an energy performance certificate (EPC) which costs £85. This is delaying the market, as it can take up to seven days for such a certificate to be approved. The result is that alot of people are choosing to lease their homes out, as it saves alot of hassle in the short term”.
“At the moment we are quiet due to the Christmas period, but we’re expecting it to pick up a bit in January. But in general sales will remain down, some consultants are telling us prices will fall by 30% next year, but that may be overly pessimistic.”
Estate agents say its hard to tell when they will see a significant improvement in the market, due to the unpredictable economic climate at present. Kennedy said:
“For a while we were told that things would even out next year, but now it looks like the market won’t bounce back until 2010. So it’s hard to tell really, we’re still selling homes but obviously at a slower and cheaper rate.”