The Bank of England’s standard based interest rate has remained at an historically low level for over 2 years at 0.5 per cent.  This rate offers home buyers and homeowners seeking a remortgage the possibility of securing interest rates not seen since World War II.  Another major impact in the housing market is the decline in house prices and the lack of home buyers due to tight lending criteria.  What should be a very favorable market to both remortgage or to purchase a home has very few showing up to take lender’s deals.

According to the LSL Property Services / Acadametrics house price index, house prices are up by 1 per cent since April 2007.  Since job wages are up by 13.7 per cent for the same time period it would appear that houses would be more affordable, yet home buyers are rare.  Lower house prices, low interest rates, a large supply of homes on the market to purchase and yet buyers are noticeably absent. 

David Brown, commercial director of LSL remarked on the current housing situation, saying, "In the last year, home values have risen by an average of £220 per month, but to keep pace with inflation, they would have had to rise by £830 per month.

"But buyers have been unable to make the most of improving affordability because despite the smaller proportion of salaries property prices currently represent, buyer confidence is low and it’s still far too difficult to get a mortgage.

"Economic uncertainty, fears over jobs, a squeeze on incomes and nervous mortgage lenders are keeping a lid on the housing market. It's no wonder transaction volumes remain so very low."