Buying a property is still a "sound investment" and potential homebuyers should not allow the doom and gloom that's rife in the media to prevent them from following their dream of owning their own home, according to the National Association of Estate Agents.
The NAEA urges consumers to be "patient" with the issues in the property and mortgage markets, but not to abandon their visions of being homeowners based on media coverage of the credit crunch.
Commenting on the instability in the property market and the consequentially unpredictable year for those affected by soaring mortgage rates and falling house prices, Peter Bolton King, chief executive of the NAEA
recognises that it has been "a tough time" for the industry.
The 'wait and see' attitude which many have adopted and the drop in house sales have clearly taken their toll on consumer confidence, he said.
Despite the "stream of negative information portrayed in the media and despite all of the pessimisms surrounding the industry", Mr Bolton King believes that "a property should still be seen as a sound investment."
He continued: "The market is shaky now but it will return in the next year or two and when it does it will offer substantial returns. The reduction in new build homes is serving only to increase pent up demand. As long as a home is purchased with the plan to settle in and keep it for the foreseeable future then now is a great time to invest in a property."
Remaining optimistic in such turbulent times might prove too difficult for some, however, if, as predicted by mortgage
experts John Charcol, dramatic increases in the cost of a fixed rate mortgage
are on the horizon.
The predictions are based on the Libor – the rate at which mortgage lenders lend to each other – which has gone up to six per cent, its highest rate since April, which could have an adverse affect on mortgage rates.
According to John Charcol, borrowers should expect a rise of about 0.25 per cent in the cost of fixed rate mortgages next week, accompanied by smaller rises in the cost of a tracker mortgage.
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