Buyers market 'unlikely'

Posted: 04 Jun 2007 11:02:58 GMT

Property market observers are not expecting a 'buyers market' in the coming months, despite the recent drop in mortgage applications and house price growth.

Property market observers are not expecting a 'buyers market' in the coming months, despite the recent drop in mortgage applications and house price growth.

According to Paul Holmes from property company Firstrung, rising interest rates and fears over falling house prices will encourage many homeowners to seek a quick sale - particularly amateur buy-to-let investors.

However, with buying a property likely to remain expensive thanks to rising interest rates, this cooling of the market is unlikely to provide first-time buyers with an easy route onto the property ladder.

"The monetary policy committee have administered medicine in order to curb inflation, which has had the resultant effect of beginning to rapidly cool the housing market," Mr Holmes commented.

"However, it would be premature of first time buyers to believe that a first-time buyers market is finally here.

"The base rate may have to reach six per cent or higher to curb the inflationary effects caused by the huge growth in money supply over the past six years."

Mr Holmes also pointed out that even a drop in house prices of 20 per cent would still see many first-time buyers struggling to afford deposits.

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