Estate agents' woes are increasing as the property market slows down. After more than a decade on the pig's back, agents are now struggling to bring home the bacon. According to Movewithus, the UK's largest network of independent estate agencies, a third of the country's agents could be forced to close their doors by the end of the year – that's around 4,000 of the estimated 12,000 currently in business. Critics may welcome the reduction in numbers, as might the residents of Chelsea and Westminster. A Barclays report reveals that there is currently one estate agent for every 173 residents in the borough.
House prices are continuing to decline, according to both the Halifax and Nationwide indices. Halifax reports that the average price dropped 1.3 per cent in April, following a 2.5 per cent fall in March. By its reckoning, the average home is now 0.9 per cent cheaper than this time last year – the biggest annual fall since 1996. Nationwide reckons that prices dipped 1.1 per cent in April, or a 1 per cent annual fall. In isolation, these figures would point to an interest rate cut tomorrow, but as oil and food prices are pushing up inflation, the Bank of England may well keep base rate on hold at 5 per cent.
GO FIGURE... 2.5%
The jump in mortgage rates faced by hundreds of thousands of borrowers. The Bank of England is certainly aware of how tough conditions are for homeowners. In its twice-yearly financial stability report, published at the end of last week, the Bank warned that many borrowers face an increase of 2.5 per cent in mortgage interest rates. Around 1.8 million borrowers are coming off fixed rates this year, and while some borrowers will be able to lock in to new fixed deals, those without adequate equity or poor credit records will be forced to pay standard variable rates of 7 per cent or more – a leap of around £2,800 a year.
Paula John is editor-in-chief of Your MortgageReuse content