Liquidity issues 'crucial to selling a home'

Posted: 13 Jan 2009 09:58:40 GMT

The Association of Mortgage Intermediaries (AMI) has suggested that homeowners trying to sell their homes may not benefit from the reduction in base rates quite as much as they might be hoping.

Following a 0.5 per cent cut in interest rates from the Bank of England, many homeowners may be hoping they will be able to sell a property quicker, but the issue of liquidity is a more important factor than rates, the AMI has said.

"While not inconsequential, the [Bank's] decision will have little impact on the real problems faced by the mortgage market," Robert Sinclair, AMI director, said.

"In order to do so the Bank and the government must tackle the burning issue of a lack of liquidity. This is what now holds back the market and it will not be solved by a further cut in the base rate."

Without banks becoming confident enough to lend to more potential homebuyers there are few things which will cause the market to bounce back, meaning those selling a home can expect a long wait before buyers are knocking on their door.

Selling a home online, however, may increase the chances of a quick sale, as more potential buyers may see the property.



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