With the latest quarterly inflation report from the Bank of England and the Monetary Policy Committee voting unanimously to hold rates again, the landscape has changed once more. The prospect of any base rate rise in 2016 has receded and there is even a possibility of a rate reduction or further QE in order to stimulate the economy. The fall in predicted growth rates puts the projected tax take under risk, so meaning that some further cuts in government expenditure may be required. For mortgages this means that rates will remain low with the SWAPs market remaining subdued and low rates look locked in. This will add further impetus to house price inflation, which when combined with a continuing lack of supply on the shelves of estate agents makes a difficult market.
The cause of this dearth of supply could be placed firmly at the door of on-line property searches. Even five years ago, people would trot down the High Street if they were looking to move. In one of the agents they would have been persuaded to let an agent come round to put their property on the market. Pre-viewing is now all done on-line and if there is nothing that interests, the potential seller takes no action. This has caused a gradual decline in the number of marketed properties. We need our estate agents to weave some magic to get us out of this conundrum.