What Are The Facts?
The housing boom that began in the mid 1990s and more than tripled house prices is what is causing our housing market to fall sharply. The housing market is adjusting itself and it is neither the government nor the public that can determine where it will settle. Homeowners were aware that the growth in house prices was extremely rapid and often well above the ration of income to mortgage.
Nationwide have stated that the average home is now worth £15,000 less than it was this time last year with values reflecting those of 2006. A representative from Citigroup also claims that those first-time buyers who succeeded in getting a mortgage paid on average £4,140 more than a year ago, and that the cost of buying a home is now 69% of the average first-time buyer’s income.
With the added extras such as the increase in fuel prices and food prices it is common knowledge that the public are now beginning to struggle. Figures state that the number of homeowners threatened with repossession rose by a quarter. More than 1 million homeowners are due to come out of fixed-rate mortgage deals this year and it is expected that many will be cornered in to difficulty due to this.
The Council of Mortgage Lenders have predicted that there will be a 50% rise in the number of repossessions this year – but if that sounds ominous consider that it is still well below the average on 1991 when 75,500 homes were repossessed!
(Tuesday, August 19, 2008)