There have been predictions of the possibility of a new housing crash which will find many of us stressing about the financial crisis all over again.
The change in government signifies the end of an era and means that some serious changes have to be made to put the country firmly back on to its feet. Interest rates and problems in the mortgage market are two major areas that will affect most of us. It has been suggested that interest rates will rise to 3. 5% by 2011.
According to Mail Online on 27. 5. 10, experts have said that home buyers face larger interest rates, bigger fees, tougher credit scoring and a greater chance of being rejected. Loans to those with a small deposit could be withdrawn altogether or come with very high interest rates which means people simply would not be able to afford them. Once again, first time buyers will find themselves struggling to get on to the property ladder. All of this could bring the housing market to a crashing halt. Read the full Mail online report by clicking here.
Property prices have increased by 10% over the last year. The housing market has improved of late due to government backing but how long can this last? The government cannot continue to plug the gap in the mortgage lending market for too long and it has been said that government backing is due to come to an end in 2012. Lenders will then have to go it alone and find cash themselves to fund loan deals. As a result, mortgage deals are expected to become tougher in the near future and this will of course affect the property market and prospective buyers and sellers.
There are some very competitive mortgage deals around at the moment and the property market is looking much healthier of late but it is difficult to see how long this will last given the unaddressed problems that lie beneath it all. I think we are heading for a tough time in the property world with a lot of changes waiting for us around the corner.