Mortgage cuts fail to raise flagging spirits

Interest rate fall: Estate agents fear house sales will remain in the wilderness without more efforts to improve job security
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The Independent Online
The mortgage rate cuts yesterday did little to raise the spirits of estate agents in Bracknell, Berkshire. Reactions in the town, where many residents are first-time buyers, ranged from "every little bit helps" to "too little, too late". The general feeling was that without job security, the housing market will remain in the wilderness.

The cuts did not generate more inquiries than usual at Parkers, a franchise of Legal & General, where Steve Ellingford, branch manager, said: "To be honest, it hasn't done anything to the housing market at all - and I don't think it will.

"They need to do something more than this to give some confidence to the market. For example, the stamp duty needs to disappear for at least a year. They've done it once before. They waived it for nine months in 1993 and you had a lot more first-time buyers purchasing houses worth over pounds 60,000. At the moment the standard three-bedroom mid-terraced house in Bracknell is pounds 59,950."

Chris Moorhouse, of Connell estate agents, had not heard of the quarter- point reduction in interest rates. "It's quite funny because I've spoken to a lot of people who are thinking of selling their house today and not one person has mentioned it," he said. "Nobody has approached me and said: 'God there's a quarter of a per cent drop, I want to sell my house'."

Paul Smith, branch manager of Woolwich Property Services, laughed at the suggestion that this cut would trigger a rush of sales, but added: "My instant reaction is that any reduction is beneficial. The market is a static market and prices aren't increasing."

According to Mr Smith it is too little too late. "It's not enough. Had it been earlier and the Chancellor had done something with the Budget I feel it could have been significant. What I'd personally like to see is for the general public to have confidence in job security," he said.

It was left to Colin Wells, a partner of Prospect estate agents, to put the positive side. "The Budget wasn't as bad for the housing market as a lot of pundits are making out. We were more optimistic after the Budget and combined with this interest rate cut there is an air of optimism for the new year."

He insisted that his optimism was not simply an effort to "talk the market up". He said: "It's only Wednesday and I've already had five people giving me instructions to put their property on the market from 1 January. Two of these requests came since the announcement.

"At this time of year we would expect to have one property coming on the market per day. The people who have rung me this week are those who have considered moving over the last 12 months but have now made the decision to go ahead."