David Brown, commercial director at LSL Property Services, said: “House prices are being supported by the severe lack of property on the market and interest from buyers with substantial capital to put behind their purchase. Although a slower rate of decline is positive, it’s much too soon to crack open the champagne. The mortgage market remains dramatically down on historical levels and cash buyers aren’t a sustainable source of demand for property. Frustrated borrowers are relying on rented homes, but there’s no finance for landlords to buy property either. Specialist lenders are excluded from government assistance but they have traditionally provided landlords with mortgage funding. The Bank of England and authorities mustn’t take their eyes off the ball – quantitative easing should be high on the MPC agenda on Thursday.
Peter Rollings, managing director of estate agent Marsh & Parsons, agrees: “There’s a severe shortage of stock on the market and with prices down by up to 30% - the value in the London market is encouraging buyers with large deposits, cash buyers and foreign investors to invest in London property. The Bank of England must continue with their programme of quantitative easing on Thursday – recovery in the mortgage market is essential to sustain this improvement.”
