UK House Prices Fall 10% Will Impact Availability of London Bad Credit Mortgages
London bad credit mortgages will be more difficult to attain as UK house prices fall by 10.9% since last August, as reported by the Halifax.
In August alone house prices fell by 1.8% which now means the average price of a UK home is now less than £174,000, resulting in the average cost of a UK home now being exempt from the new Stamp Duty threshold set by the government yesterday.
The impact of this new data means that house prices are back to what they were in 2006. However this also impacts the ability of many people with an adverse credit history looking to get a bad credit remortgages. Why is this you may ask?
Reduced prices means less equity left in your property which means there is less home equity release available enabling people to get a bad credit remortgages as the loan to value (LTV) will in many occasions be too high to support a mortgage offer from specialist sub prime lenders.
Obviously this will substantially impact the London and the south east area in general and places like St Albans, Watford, Harrow and Hemel Hempstead in particular. As the expensive housing sector falls it further distances potential borrowers from being able to remortgage due to bad credit and the falling value of their property which further exasperates the problem.
Prices are set to fall further as the credit crunch continues and puts further pressure on mortgage availability as income continues to be eroded by high inflation.
Recent government action looks set to encourage people to get on the property ladder at a time when house prices are tumbling down.
One has to ask the question, is it a responsible strategy to advice people to buy into the property market knowing it could result in them shortly being in negative equity?
In addition, how this policy sit with the FSA’s Treating Customers Fairly philosophy?
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