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Mortgage and Housing Prices Equally Decline in the Market

In the last year we have seen a lot in the UK as well as in the US economy towards the housing and mortgage market. The affects of the US subprime crisis, has reached the UK even when those who are analysts refuse to see it. The fact is with a survey completed recently by the Royal Institution of Chartered Surveyors, the numbers are in black and white. For the total number of companies surveyed it was found that just one percent below half have reported falling prices in the housing market. You will find that this high number is actually the highest it has been in over a decade.

It seems that the situation is going to remain in this state for a while during 2008, and that it is compounded with the mortgages being more expensive. Since the average mortgage has a fixed rate of 7.30% the UK is bound to see a decline overall in the market. The consumers who are looking to purchase a home, need to have the housing prices at a lower cost to them in order to afford the current mortgage rates. The Bank of England can regulate other mortgage rates, but they have very little to do with the fixed interest rates of other lenders. In fact the other lenders do not have to follow the official Bank of England rate. They do however have to follow that interest fee for the other loan types.

You will also find that many of the lenders have chosen to change the amount they are going to lend. For instance if you have a home that is going to need a 200,000 pound mortgage you are only able to get the loan for perhaps 75% of the loan to value on the home. In other words you will have to have the 25% of the housing cost in your bank account before you can entertain obtaining that particular property. This of course means that many of the individuals seeking new homes have needed to find something that is in their price range, but that will also fit within the loan to value amount the bank is willing to award.

You will find that it can be extremely problematic to find a loan with the current state of things. Since the lenders are not allowing for a high amount to be borrowed the consumers are spending more research to find the proper loan. There are other things that the customers need to look at, including the arrangement fee for the loan. You see when the rate decreases, as well as the housing prices- the banks are increasing other areas. The fees for closing on a mortgage are increasing so the banks can make back the amount they need to make. Overall in the housing market you will see a decline on housing prices as well as a decline on the number of mortgages being issued due to the current economy around the world.

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