Bank of England Maintains Bank Rate at 0.5%

The downturn in housing turnover over the past two years prompted many contractors to let their old properties out rather than sell at a loss, this has in effect turned a large number of contractors into “Accidental Landlords”

The surge in these so-called 'accidental landlords' has limited the supply of property in the sales market and increased the stock of homes available to let.

The good news for buyers is that all the signs show that many of these homeowners now have an opportunity to sell, shifting a large number of properties across from the inflated rental market to the sales market.

An Opportunity to Sell:

David Smith, of property consultancy Carter Jonas, said anyone hoping to sell now had a "window of opportunity" that might soon shut.
"We have to expect more turbulence ahead, specifically as a result of rising unemployment and interest rates," he said.

"This toxic combination will bring more property on to the market as people struggle to meet their repayments, which will apply downward pressure on prices and potentially reverse the recent trend, at least for a time," he added.

House Prices Continue to Recover

Latest figures reported by the Nationwide suggest that house figures have recovered to the same level as a year ago.

For five consecutive months house prices have risen and the latest rise of 0.9% brings the average UK Horse price to £161,816 matching the average price for September last year.

"The most intense phase of the recession and financial crisis has probably passed," said Martin Gahbauer, the Nationwide's chief economist.

"However, given that the housing market still faces considerable headwinds in the form of high unemployment, restrictive credit conditions and an impending withdrawal of the stamp duty holiday, it would be surprising to see house prices continuing to increase at the very strong rate seen in recent months," he added.

Options for Contractors & Freelancers

Taj Kang, Associate Director at Contractor Mortgages Made Easy, commented "I can see good opportunities for those who are thinking of buying a new home."

"Reluctant owners of second properties may now be marketing their properties for sale. This will mean there could be more housing stock on the market for contractors and freelancers thinking of buying their new home. The withdrawal of the stamp duty holiday at the end of the year means that there is also a good financial incentive for those looking to secure that new property sooner rather than later.”

Reaction to the housing market upturn

However, lenders have also said that this is not the start of another boom.
It is encouraging to see such a rebound in prices, but a bumpy recovery could turn out to be quite some understatement according to certain commentators.

But Gary Smith, president of the National Association of Estate Agents, said: "The latest statistics from Nationwide appear to confirm that the housing market has finally bottomed out and indications are that we are hopefully moving to a point where the gradual recovery in prices witnessed this year will be sustained.

Taj Kang Associate Director of Contractor Mortgages Made Easy has welcomed the news, but warns that the banks need to play their part in any recovery.
“The continued upturn within the housing market will be largely dependant on lenders playing a significant role, to ensure that they continue to help borrowers meet their aspirations of moving or owning a home. They can do this by offering lower rates offered to borrowers with smaller deposits.”