More doom and gloom as the average price of a UK home has fallen to levels last seen in August 2004.
We have seen house prices fall by 16.2% in 2008 which is said to the biggest annual drop since records began.
The average UK price fell by a further 2.2% in December, to bring the average cost down to £159,896.So good news for some people who can afford the larger deposits required to get a mortgage in the current climate but for most it won’t be welcome news as many watch the value of their homes falls and for some slipping into negative equity.
There are many different predictions as to how long the recession will last and as we progress the predictions seem to point towards a longer recession (ok not technically yet). House prices are also predicted to fall further and not likely to recover until at least the second half of this year. I’ve heard predictions of a further 15% fall in house prices in 2009.
Although stability is returning to the mortgage market, mortgage lending has risen in November, there are still too many negative factors affecting the market from rising unemployment, widespread expectations of further house price drops and tightened credit conditions – despite the rising lending it is still only 10% of the 2007 level.
For first time buyers whether you want a Falkirk mortgage or Fulham mortgage my advice would be to save! While house prices continue to fall and mortgages are difficult to obtain my advice would be to work on saving for a deposit so when the market does improve, you are maximising your options to ensure you pay a good price but also get a mortgage at a good rate.
If you want to see what is available to you, a good mortgage broker can search the whole market to give you an idea of what to expect, it is even worth doing so you can compare this to a mortgage quote in six months time. Even if you do have a mortgage it is still worth using the services of a mortgage broker to ensure you are getting the best deal, especially if you are on a standard variable rate which can often be a higher rate than fixed rate mortgages.
About a week after the first Thursday of the month would be an ideal time to search as this is when the Bank of England’s Monetary Policy Committee meet to decide on whether to keep, cut or increase interest rates. In January its widely predicted interest rates will again be cut.
