House price recovery is no blip, says Assetz

15 October 2009 | Updated: 16 October 2009 4:30 pm | By Natalie Thomas

Assetz says concerns that imminent interest rate rises will trigger a wave of forced sales coming to the market are unfounded.

With Bank of England base rate set to remain low and property sales underpinned by a lack of supply, Assetz says forced sales will not be an issue.

Mortgage rates are likely to be stay flat the company says as there will be mounting government pressure on lenders to ensure payments stay affordable.

Assetz says that lenders will face even more pressure to bring in more competitive deals once the main house price indices start showing positive annual growth.

The company believes this could happen by the end of the year.

Assetz also points to the slowing growth rate in unemployment to argue against those who believe that a surge in joblessness will create more distressed sales.

Stuart Law, chief executive of Assetz, says: “Lenders are still resisting the market’s natural buoyancy with strict lending criteria ruling out thousands of sensible borrowers, but this will not continue forever.

“As soon as they are confident that the housing market is making a sustained recovery and the risks are diminishing, they will move to offer more attractive products to borrowers.

“I expect this to happen within three months of the major house price indices moving into positive growth, which means improving lending terms in the first quarter of next year.”