Buyers and sellers have been urged to hold their nerve amid increased speculation that interest rates may be about to rise.
Some business analysts say a sharp increase in operating costs in the service sector could signal a hike in rates by the Bank of England by the end of the year.
Any rise will almost certainly impact on the property market at some stage, but Ben Dreher, Director at Mansbridge Balment’s Plymouth City Office, said that right now, it is important to stay positive.
“Without meaning to sound trite, the only thing we can be certain of in life is that there will be uncertainty,” said Ben.
“There is much to be positive about at the moment in terms of the local property market, which continues to thrive. We have more first time buyers looking to get on the housing ladder and vendors seeing high demand for their properties, often achieving asking price or sometimes above.
“Against the continued backdrop of the Brexit negotiations, it is probably fair to say that the current times we are facing are more perhaps more uncertain than usual, but isn’t that all the more reason to live in the moment?”
Ben firmly believes that there are enough checks and balances now in place to prevent the economy returning to the bad old days of boom and bust, or the dreaded credit crunch.
And he pointed to the potentially positive effect a recent rate rise by the Federal Reserve in America could have on the housing market there.
“As the rise was well within the range industry analysts in America had expected it is unlikely there will any significant knock on effect on mortgage rates,” said Ben.
“Indeed, it is more likely to simulate the U.S. property market in the short to medium term, galvanising homebuyers into action as they seek to complete a purchase before rates go any higher.
Kevin Parker of CMB Mortgage Consultants in Plymouth says business is still brisk and while he has sourced a variety of mortgage types for clients he points out that 90 per cent of those products are benefiting from fixed rates as low as 2%.
“It is important to keep some perspective here,” said Kevin.
“What people should remember is that generally speaking a Bank of England rate rise is likely to be around 0.25%, which still keeps fixed rates lower than 2.5%.”
Recently, the Governor of the Bank of England Mark Carney suggested rates could rise in the UK in the “relatively near term” and indicated banks had “not been as disciplined as they should be” in controlling consumer debt.
Ben believes he is right to sound a note of caution.
“Fundamentally, it is about keeping as tight a rein on our economy as possible. Growth is important, but so is stability. That’s the same for any sector, not just the housing market,” said Ben.