Today's (24 January 2017) announcement by the Monetary Policy Committee meeting that the repo rate remains unchanged is surely what is needed to help fuel increased activity in the residential property market, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
"Amid subdued economic growth and with an eye on global volatility, the country's housing market remains resilient in the face of a range of economic and socio-political challenges, demonstrating ongoing, underlying consumer confidence in this increasingly popular asset class.
"Owning a home is a key imperative for a broad range of people across all regions and walks of life, including a savvy, younger generation, not only in providing a secure roof over their heads but also as a sound investment over the medium to longer term."
Dr Golding says indicative of this is recent data from mortgage originator ooba, which reports that during 2016, 95 percent of purchases have been for a main residence, with 4.7 percent acquired for investment or buy to let purposes, and the balance of 0.3 percent for own leisure use.
Ooba also says the percentage of purchases for investment properties has risen from a cyclical low of 3.0 percent in June 2016 to 5.5 percent by December 2016, while during the same period, acquisitions of holiday homes also strengthened from 0.3 percent to 0.5 percent of total mortgages extended.
Says Dr Golding: "It is certainly hoped that interest rates have now peaked and that we may anticipate sustained stability in the repo rate and even some downward movement during 2017 or in the early part of 2018. This would alleviate pressure on consumers who have to contend with affordability issues as a result of rising costs across utilities, property rates, food and fuel.
"With the National Budget around the corner, it is hoped that further relief may be afforded to existing and aspirant home buyers in terms of reduced transfer duty. Investment in owning a home is to be encouraged, particularly as a form of saving for the future, and for first time home buyers in particular, along with providing for a deposit, transfer duty remains a significant 'hurdle' to be overcome in the buying process."
© Pam Golding
