The statement of the head of the Bank of England gave impetus to the property market in the UK

Representatives of the real estate industry of UK has approved the application of the Bank of England that it intends to keep interest rates at historically low levels for several years. However, the new head of the Bank of England, mark Carney, takes a different approach to this issue and at the last meeting of the Monetary policy Committee of the Bank (MPC) agreed to provide clear guidance on the conduct of monetary policy.

He intends to raise interest rates from the current level of 0.5% until at least until the unemployment rate in the UK drops to 7%, which can be no earlier than 2015 or 2016. Paul Smith, chief Executive officer estate agents BAAPT believes that now is the biggest impetus that the real estate market has not seen in a long time. This helps lenders to record and offer really great prices for those who are willing to get a mortgage loan.

He also believes that it contributes to economic growth and increased demand for property in the UK, but despite this, there is a shortage of new residential properties coming onto the market. However, the statement of the head of the Bank of England gives the real estate market confidence, which is important for further growth and increased activity.

Brian Murphy, head of the Bureau on the Advice of Mortgage Lending (MAB), believes that this announcement should prolong the Golden age of fixed mortgage rates we’re seeing right now.

The fact that mark Carney is in no hurry to increase the base rate until the economy shows signs of improvement, making variable interest rates safer. Lenders are already feeling the rush of funds, and will consider how they can reduce fixed rates to attract business.

Returning to pre-crisis levels of transactions and high level of lending, Carney clearly expects the mortgage market and looking for ways of recovery that plays a big role in the growing economy. Most likely, his statement means that the situation in the foreseeable future will be in favor of buyers.

According to Peter Williams, Executive Director of the Association of intermediaries of Mortgage Lenders (IMLA), it is hoped that under the leadership of the new head of the Bank, the monetary-policy approach of the Bank is shifted in the direction of the real estate market, moving towards medium and long term.

Even today the construction market remains very weak and unproductive for the economy as a whole, and its potential is used insufficiently. The level of housing construction should rise, if the government wants to avoid a collapse of the housing sector and mortgage market under the weight of growing interest and suggestions. When it comes to addressing issues of housing policy, the government would do well to follow the example of the mayor of London in making long-term decisions.

Pitre Rawlings, Executive Director of real estate company Marsh & Parsons, also thinks fixed rates will contribute to the growth of the real estate market. The London market in particular currently relies on the growth of positive sentiment in part with funding from Government Credit Schemes, programme “Help to Buy” and strong demand in the domestic market and abroad. The country’s GDP growth, reducing unemployment, gives the feeling that the UK is finally out of the economic hole and the real estate market on the background of preservation of interest rates and other positive factors can be confidence in the bright future.

Mark Carney made a very important statement which will allow lenders to offer deals on favorable terms to potential buyers that will undoubtedly lead to increased demand for not only primary market but also secondary and will provide impetus for buyers. All these measures will give the UK property market in the long-awaited stability.

® Maxim Savitsky G. 09.08.2013