Nigel Favas, Managing Director of Reeds Rains estate agents, who has branches in Wales commented:
“House prices are showing remarkable resilience given the current state of the European economy. Mortgage lenders are offering cheap fixed rate deals to wealthier buyers and buy-to-let landlords, which is encouraging more investment in property. Affluent buyers are supporting prices.
“On the flip side, the overall market remains subdued, thanks to the ongoing struggles of first time buyers. Credit conditions are restricted, and the major UK banks are shrinking their assets in a bid to mitigate the affects of the crisis in the Eurozone. This is hampering their ability to lend, and is encouraging them to demand increasingly big deposits from borrowers. This is freezing out the majority of first time buyers and leaving the bottom end of the property ladder in a state of protracted gridlock.
“With public sector cuts set to bite hard, and economic growth stalling, demand at the lowest end of the market is likely to fall further over the winter. This climate of uncertainty is creating a domino effect as would-be buyers who might be able to buy are staying put and biding their time. On the demand side, potential sellers are sitting tight to weather the current economic storm, hoping that prices rise from their subdued levels.”
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