As the housing market starts falling is this going to most difficult year for many home owners. As the prices fall by up to £3,000 per month, this is not the time move. But as I’m sure you will have noticed a lot of houses that were for sale late last year are now for rent, people who have let their property will not find it an easy marked.
If your house is on the market you would be very lucky to sell it, the biggest problem is agreeing a sale price and then all the people in the chain being able to to get the mortgages and financial security.
Almost 3,000 home owners are falling into negative equity every, negative equity is bad if you are planing or need to move. Negative equity means you are paying more for your mortgage then the value of your property. But over a period of time house prices will increase after the low.
I am not surprised this has happened to the housing market, the prices were getting so high and out of control. I know a lot of people hold the banks responsible for the housing situation, but we had a lot to do with it, people over estimated their salary with self certification and people mortgages them self’s up to the hilt.
For the last 10 or so years we have lived in society were money talks, even if you haven’t got any. Most people wanted to live in the bigger house, in the posher area, but could their really afford it. We have always had an opinion in Britain will buying houses, when most of Europe rent.
House prices fell a record 15.9pc in 2008, says Nationwide
House prices fell 15.9pc during 2008, the biggest annual drop on record, new figures from Nationwide showed today.
The average cost of a UK home dropped by a further 2.5pc in December, dashing hopes that November’s slide of 0.4pc marked a stabilisation in the rate at which prices were falling.
Nationwide warned that prices were likely to have further to fall before significant numbers of buyers returned to the market as affordability measures still remained well above their long-run average.
The annual change, which was the biggest since the group began collecting data in this format in 1991, left the average house price at £153,048 – £20,000 less than in December last year and back down to levels seen in the spring of 2005.
Fionnuala Earley, Nationwide’s chief economist, said: “2008 has been a year of turmoil in the UK housing market. The disruption in the financial markets worsened throughout 2008 and had larger implications for the real economy than we anticipated a year ago.
sourced from The Telegraph read full article
The housing market is set to fall through out 2009, this will put many more people in negative equity and financial hardship.
The average house is worth £36,000 less than it was in summer 2007. The rate of repossession is set to soar as people struggle to meet monthly mortgage re-payments. So maybe the best thing to do now is just weather the storm. Don’t move unless you have to and don’t put your on the letting market unless you ready for a lot of hard work and not necessarily make money from it.
House prices fell by a record 8.6% during the year to the end of November 2008.
UK homes lost a further 1.9% of their value during the month, pushing their average price down to £199,732 – the first time the figure has dipped below £200,000 since November 2006, according to the Department of Communities and Local Government.
The data came as the Royal Institution of Chartered Surveyors said the number of homes changing hands had fallen to a new record low during the three months to the end of December at an average of just 10.1 sales per chartered surveyor estate agent.
It is expected that house fall by a further 15% this year as a result 1.5 million house holds will be in financial trouble.
Facing up to house price deja vu
House prices have dropped by 14.6% in the last year, says the Nationwide
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Faced with a nosedive in UK house prices, some homeowners are suggesting we learn from the past to prepare for the future.
Many say that studying the last housing downturn of the 1990s would ease the pain of the current slump.
So, what was the picture more than a decade ago? Are young buyers and sellers making the same mistakes as they did back then?
Readers’ views
There is no doubt that a strong body of opinion reacting to previous stories on the housing market believe we have learned nothing.
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 As well as realising their own aspirations to become owner-occupiers, first-time buyers help oil the wheels of the housing mar  CML
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“My advice is to enjoy your house as a home, something we have forgotten about in this country,” said one BBC website reader from Bath, recalling his home’s value dip from £52,000 to £36,000 and then recovery to £60,000 in the 1990s.
Other readers suggested that saving up a hefty deposit before buying cushioned the blow of falling prices.
Some stressed that patience was a virtue as house prices would recover, yet there has also been surprise that the banks were so free in their lending during the latest boom.
“I used to be in this situation [negative equity] myself in the early 1990s and I am very surprised that the government of today has allowed this to re-occur,” wrote Mark Coleman, of Kettering.
“In a stable market, house prices rise due to demand, the banks are happy to lend money way above earning figures, and this is a recipe for disaster. Why has nobody learned from previous situations.”
sourced from The BBC read full article
UK’s mortgage market in graphics
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 £112,756: Average new mortgage for house purchase
£40,500: Average income of new mortgage holders
25%: Average deposit
17.4%: Average interest payment as proportion of income
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The Bank of England’s Monetary Policy Committee has cut the Bank rate to 1.5% from 2%.
It takes the Bank rate down to the lowest level in the Bank of England’s 315-year history.
This is set to benefit many tracker and variable rate mortgage holders whose monthly repayments will fall.
Here is a snapshot of the current state of the UK mortgage market in graphics, including a table showing which lenders have decided to pass on the Bank rate reduction to variable rate mortgage holders.
Libor – the London Interbank Offered Rate – is key to the calculation of mortgage costs. It is the rate banks charge when they lend money to each other.
If the rate is high, this generally means that the interest rate charged on new home loans is more likely to be high. Some variable or tracker mortgages are linked to Libor rather than Bank rate.
During the credit crunch, with banks uneasy about lending to each other, the gap between the Libor and bank rates grew wider.
Savers have also been affected by the recent cuts in interest rates, with their returns on deposits falling.
Here are some key facts on the situation for savers:
- £1.5 trillion: Total UK consumer borrowing
- £1.1 trillion: Total UK consumer saving
- 1.68%: Average interest rate for savers in all bank and building society instant access accounts
- 21.1%: Share of savings held by building societies
- 70.5%: Share of savings in banks
- 8.4%: Share of savings with National Savings and Investments
Source: Building Societies Association / Bank of England. Figures from November 2008.
sourced from the BBC
