Thursday, 20 November 2008

Cut it out!

So the big news today is that the base rate is likely to be cut to 1% by the new year. Great for those of us tentatively waiting to buy a house (those who have managed to a. get a mortgage offer and b. amass an enormous deposit), but not so great for those of us at the other end of the chain, like me, who are currently trying to sell a house.

The problem for us here at is the part that the media play in all of this. All the time there is uncertainty in the air thats being reported on, how can anything possibly move on? Sensationalism like 'BASE RATE TO BE CUT TO 1%' does little other than to continue to stall an already dead market.
What the majority of people need to realise is that it doesn't matter how much you lop off your house price, in the belief that this will be enough to raise that sale, it's going to make little difference when if there are no buyers, because they cant get mortgages, because the greedy banks won't lend to each other, then there is no bottom rung of the ladder ipso-facto there are no buyers and it still won't sell.
Say I lop another £100,000 off the price of my house (a nice 2 bed rural bungalow) and put it on the market at £150,000, if people can't raise that level of mortgage it's not going to sell. Simple. Reducing prices and rates now in the hope that this is going to kickstart the market is only going to lead to huge problems later on when those devalued properties and almost unheard of low interest rates rocket again in 2-3 years time and the whole cycle starts again.
I can see this, my pal who is just about managing to keep his estate agency afloat can see this so why can't the British Media see this too.
Its time to report on balance guys and see beyond the sensationalist headlines. What we need right now is stability, not uncertainty in uncertain times.

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