Brian Holt praises bank action to steady the housing market

Bank of England action to rein in house price inflation and encourage sustained and stable growth has been welcomed by estate agency Brian Holt whose Earlsdon and Kenilworth offices saw an increase in sales and valuations in June.
Brian Holt Estate Agents.
Coventry.Brian Holt Estate Agents.
Coventry.
Brian Holt Estate Agents. Coventry.

But the agency adds that, despite the bank’s best intentions, until more homes are built to meet demand, prices are still likely to be heading upwards, albeit at a slower rate.

Last month saw a 33 per cent rise in home sales in Earsldon compared with the same period last year, with contract exchanges rising by a quarter.

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At the same time, valuations rocketed by 56 per cent, there was a 40 per cent jump in the number of people adding their names to the mailing list and viewings rose by a third.

In Kenilworth, there was a 50 per cent jump in the number of new homes coming onto the market, and a 15 per cent rise in people asking for their properties to be valued.

The figures coincide with recent action announced by the Bank of England’s Financial Policy Committee (FPC) to try to prevent the housing market from overheating.

From October, lenders will have to apply tighter affordability checks to anyone who wants to take out a mortgage.

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Borrowers will need to prove they can withstand a 3 per cent rise in interest rates from their current low level.

In addition, lenders will only be able to offer riskier mortgages - where the amount lent is 4.5 times the borrower’s annual income - to no more than 15 per cent of their customers.

This is in addition to the Mortgage Market Review, launched in April by regulatory body, the Financial Conduct Authority, which requires lenders to carry out new affordability checks on mortgage applicants.

Earlsdon manager Gary Sproul explained: “Part of the reason for the increase in sales in June may well be down to the fact that these were sold to people whose mortgages were approved before the MMR came into force in April.

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“We anticipate that the tighter constraints on lending imposed by the Mortgage Market Review will see completions taking longer in the autumn.

“But people still want to move – and with not enough houses to meet demand, we are still likely to see prices on the up despite the Bank of England’s attempts to slow that rate down.”

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