Tough times ahead for homeowners
July 14, 2008
Officials from a debt advisory company have stated that following bleak forecasts from the Council of Mortgage Lenders with regards to house price movement homeowners in the UK need to brace themselves for some very tough and challenging times ahead. Officials from the group are urging homeowners to prepare for difficult times, and if necessary to seek advice from experienced professionals with regards to their financial situations.
The group recently stated: “The CML anticipates a 7% year-on-year drop in house prices by the end of 2008. After a decade of rapid growth, this is clearly an unwelcome shock to homeowners. If they’re thinking of moving, they may feel compelled to accept a low offer if they wish to sell their property before prices drop further. And anyone seeking to consolidate their debts with a secured loan or remortgage may have less equity to draw on. They may wish to wait for conditions to improve before they consolidate their debts – and if they can’t wait, they may well have to consider alternative debt solutions, such as a debt management plan or IVA.”
An official from the company also went on to state: “Naturally, people with high-LTV mortgages are particularly worried about negative equity: when a property’s value is less than the debt owed, the owner can be ‘tied in’ to their property, unable to sell it to clear their mortgage debt. Anyone in that situation should seek debt advice without delay.”
He continued: “What’s more, the current lending squeeze means that many potential first-time buyers can’t take advantage of falling prices – so today’s tighter lending criteria are depriving the housing market of the demand that could help bolster those prices.”
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