The first "green shoots" of recovery in the housing market have been hailed by economists after figures showed an increase in the number of mortgages being taken out and property sales increased for the first time since 2007.
It comes as the number of new homebuyer enquiries rose for five consecutive months, with evidence showing that this is beginning to feed through to sales, according to the Royal Institution of Chartered Surveyors.

It said the number of new buyer enquiries increased at the fastest pace since September 2003 while the number of properties actually being sold by estate agents increased for the first time since November 2007.

Howard Archer, economist at Global Insight, said: "There are increasing signs that the housing market activity may have passed its worst point."

Ian Perry, RICS spokesperson, said: "The market is still in a fragile state but with demand continuing to pick up, there may be more signs of stabilisation in the coming months."

At the same time, the number of mortgages approved for those buying a new home also rose in February, according to the Council of Mortgage Lenders.

Numbers rose from 23,400 loans in January to 24,300 loans in February, a 4 per cent increase.

The number of loans approved to first-time buyers also increased by 7 per cent to 9,400 in February.

Michael Coogan, director general at the CML, said: "There are some positive signs for later in the year."

However, the lack of affordable mortgages remains "a barrier" to most first-time buyers who typically had to find a deposit of 25 per cent, a record amount, the CML explained.

But there was positive news for those looking to buy their first home as falling house prices meant first-time buyers borrowed less. The average first-time buyer loan was £95,000 in February, down from £97,000 in January and £114,000 in February last year.

The CML also highlighted a shift away from tracker mortgages towards fixed rate deals as borrowers looked to lock into historically low interest rates of just 0.5 per cent.

House prices fell last month by 2.3 per cent, wiping out the 2 per cent rise in January, bringing the average cost of a home to £160,327, according to Halifax.

RICS said the number of properties being sold by estate agents rose from 9.6 properties during the three months to February to 9.7 properties during the three months to March.

David Hawke, a RICS member based in Nottinghamshire, said: "There are some signs of "green shoots" but mortgage money is still tight."

And Benson Beard, a RICS member based in London, said: "The last month has definitely seen an increased in buyer numbers and agreed sales.

"We can all look forward to a tough year but one that in hindsight may yet signal the bottom of the market."

In line with predictions, the Bank of England cut interest rates to one per cent today - this latest cut is the fifth consecutive rate slash and takes the base rate to an all time low as the Bank grapples with the deteriorating UK economy...

Despite the growing calls from the industry to hold rates at 1.5 per cent, this cut to one per cent was predicted by trade bodies more than a month ago.

The dramatic reductions - from five per cent last October - have been good news for most borrowers with tracker mortgages but the overwhelming response to the latest cuts seemed to be that they would do little to help consumers unless the lenders passed them on, thus bringing some liquidity back into the market.

Not all those who have trackers will benefit though -some lenders have implemented ‘collars' on their mortgages which means that the rate borrowers pay cannot fall any further.

Today's decision follows the International Monetary Fund's (IMF) forecast that Britain would suffer worse than all other advanced nations in the worst global slump since the Second World War.

Philip Selway, Managing Partner of property buying consultancy The Buying Solution, told TheMoveChannel.com, "Provided the lenders pass it on, the 0.5 per cent cut in interest rates coupled with falling property prices should further stimulate those who are in a position to buy.

"Clients who need to purchase this year are aiming to do so whilst house prices are still on a downward slope, and with savings rates at an all time low, now is looking like a good time for them to protect their capital in the long term by way of property purchase," he added.

Jonathan Turpin, Chief Executive of Moveme.com said, "This latest cut will mean very little to most homeowners on fixed rates and those where lenders have been slow to pass on previous rate cuts.

"In the longer term, low interest rates will allow people to borrow at more reasonable levels and take advantage of falling house prices, however, if lenders do not look at reducing the higher loan to values and expensive arrangement fees recently imposed, first time buyers especially will find it just as tough to make their first purchase," added Mr Turpin.

The Building Societies Association had warned against cutting rates in a bid to protect the interests of savers, who have seen returns dive by 75 per cent in recent months.

They argue that it is not logical to hit savers with rate cuts when they represent the one group who may be able to buy and resume the process of lending.

Adrian Coles, Director-General of the BSA, says: "Mortgage availability, rather than the cost of mortgages, has become a more pressing issue over the last few months.

"This suggests that what is important to potential borrowers is maintaining the flow of mortgage funds to the market rather than reducing interest rates further.

"We need to ensure that those with at least some capacity to supply funds for mortgage lending - personal savers - are encouraged to do just that," he added.

There are also fears that borrowers will hold out for better deals in line with their expectation that rates will fall below one per cent.

Meanwhile, foreign investors are keen to snap up UK properties at a bargain price, potentially pushing prices up again before the next generation of Brits can get their hands on a first home.

The question now seems to be ‘What will the Bank of England do when rates reach zero and there is nothing left to cut?'

They may well be forced to resort to ‘quantitative easing' which means increasing the supply of money in the economy to buy assets from banks, or boosting the reserves that the banks hold on deposit in the Bank of England.

This year will provide many opportunities to upsize your property!

It might appear daunting to upgrade to a larger property in a falling market, but now is the time to take such a seemingly bold decision. Our reluctance to move is down to a lemming mentality, believes Ed Mead from Douglas & Gordon in south-west London. Ironically, people feel more confident going up the ladder in a rising market. Yet, with prices predicted to continue dropping over the next six to 18 months, he says that this is the right point to break away from the pack. ‘The wisest are swallowing their pride and moving now.

In two years’ time, they’ll look very clever.’ Upsizing in a falling market can save thousands of pounds. If you sell a £300,000 house and buy a larger one worth £500,000, you might lose 10% (£30,000) off the one you’re selling, but you’ll save 10% (£50,000) on your new home a saving of £20,000. Another advantage of upsizing in a recession is being able to move to a better area. ‘Those who had to go to Herefordshire because they couldn’t afford Gloucestershire can buy there now,’ explains James Hayman-Joyce from agents Hayman-Joyce in the Cotswolds.

Author Margaret Price and her retired-headmaster husband, Christopher, have benefited hugely from upsizing. After selling their Somerset house 2½ years ago, they spent a frustrating period bidding for overpriced houses and being gazumped. Now that the market has turned, the couple have picked up a six-bedroom, five-bathroom house, substantially bigger than their old home, just outside Newton Abbot, Devon, for a reduced price, through Marchand Petit. ‘We saw the house in the spring of 2007 when it was on the market for £975,000, and we bought it recently for less than £875,000,’ explains Mrs Price.

In the process, they also gained a large workshop, a bigger hall, a good-sized kitchen and a four-acre garden. Mrs Price thinks you need to be bold when upsizing. ‘Determine the circumstances of the seller, and, once you find something you like, be tenacious.’

Today’s cut in interest rates by the Bank of England means they are now at their lowest level in the Bank’s 315-year history, a move largely welcomed by the property industry:-

The Bank of England has today cut interest rates by half a percentage point. They now stand at 1.5% - the lowest in the Bank’s 315-year history.

Analysts view today’s cut as necessary to help support the economy through recession. No one is ruling out the possibility now that base rates could fall to zero over the next few months, a first for the UK.

The move has met with approval from members of the property industry. Winkworth welcomed the decision saying: ‘The rate should encourage renewed interest in property as an investment as interest on savings fall.’ Managing Director Dominic Agace added: ‘I don’t foresee an immediate reaction, but it represents some positive news for the property market.’

Philip Selway of The Buying Solution, a buying agency, echoes the feeling that savers are going to be encouraged to put their money into bricks and mortar, rather than watching it waste away in savings accounts. If property prices are reduced by 20% to 25% from their peak, he has clients who are ‘keen to do business early’.


James Thomas of Jones Lang LaSalle believes that while banks remain cautious about lending, property owners aren’t going to feel immediate relief from this base rate cut. ‘Furthermore, rising unemployment and uncertainty about job security will see potential buyers very reluctant to commit to any purchases.

‘The only sign of respite for the housing market is that the large interest rate cuts made last year are feeding through to the LIBOR rate. The 3-month LIBOR rate was 2.65% at the start of 2009, down from a peak of 6.30% at the start of last October. Lenders’ standard variable rates are falling as a result, which will ease the pain somewhat for borrowers coming to the end of fixed-rate deals and unable to remortgage.’

The Wright Estate Agency in Major Property Website Initiative


Nick Julian – Managing Director, of the Isle of Wight property specialists, is joining with other
pre-eminent estate agents throughout the UK to feature their clients’ properties on a new and important property website - www.mayfairoffice.co.uk

“The internet plays such a big role in property marketing today,” says Nick Julian, whose firm has been ‘on the internet’ for as long as most. “Buyers often start their property search nowadays by visiting the area electronically through the internet. More and more buyers choose the internet for speed and convenience.

“Our internet strategy has to reflect this. So, in addition to our own highly popular and well-used website, it is important that buyers can find our clients’ properties through other websites as well.

“The importance of the new Mayfair Office site cannot be underestimated. It has been designed for ease and convenience. It is essential that major independent firms like ours have access to a national site that reflects our reach over the entire country. Buyers come to the Isle of Wight from all over the UK for a variety of reasons, and our association with fine estate agency firms in other areas means we can tap into a national group of buyers.

“This is a sophisticated, good looking and easy-to-navigate site, and one free from gimmicks. These factors were most important to us. Not only did we want to avoid long and frustrating download times, but also we wanted a site free of clutter. We required quick access to the property search portion and to our other specialist areas.”

The website covers the UK and offers buyers some very useful features including dedicated equestrian and waterside property sections. There is also an overseas property section for those seeking to buy a holiday home or investment abroad.

For further information about The Wright Estate Agency and the new Mayfair Office website please contact any one of our branches, or visit - www.mayfairoffice.co.uk