Double dip in housing market unlikely, says property group

Double dip in housing market unlikely, says property group




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Predictions of an imminent second dip in house prices are likely to be wide of the mark, the investment specialist Assetz has said.

Forecasts of a 'double dip' in the housing market have mostly stemmed from the possibility of a new wave of forced sales, resulting from interest rate rises.
 
However, the firm has said that this concern is misplaced, with the Bank of England base rate expected to remain low for the foreseeable future and property sales underpinned by a fundamental lack of supply.
 
Commentators, such as Capital Economics, have suggested there will be no significant increase to the base rate for the next five years and Assetz has also rejected claims that mortgages are due to become less affordable in the short-term and medium term.
 
Additionally, the company has said that the current imbalance between pent up demand for homes and available stock is so severe that any increase in private seller supply would not have a “significant impact.”
 
New home building is also set to remain subdued for the foreseeable future, which would also reduce any prospect of the market being flooded with property and consequently driving up prices.
 
Stuart Law, Chief Executive of Assetz, said: “Lenders are still resisting the market’s natural buoyancy with strict lending criteria ruling out thousands of sensible borrowers, but this will not continue forever. As soon as they are confident that the housing market is making a sustained recovery and the risks are diminishing, they will move to offer more attractive products to borrowers.
 
“There is an expectation that recent house price strength will bring a flood of sellers to the market, almost overnight, but any increase is likely to be balanced out the large number of buyers now looking to make their move. Overall I expect it to be a steady and well balanced process.”

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