Outlook for Mortgages and the Housing market in 2008
There were strong indications that the UK economy was set to become more difficult and the outlook for this year is looking to confirm this. The mortgage product market will see similar pressures and customers are likely to see stricter borrowing terms and possible hikes in monthly mortgage payments.
Evidence clearly shows that over a million people will suffer monthly mortgage increases simply as a result of their fixed rate term on their mortgage coming to an end, the differential in interests rates may impact borrowers by an average of £200 a month. These sorts of indicators will have consequences resulting in many people having to borrow more and possibly borrowing out of their means.
Some industry specialists have even speculated that consumer confidence is likely to be heavily impacted as a result of predictions for insolvency figures of 130,000. Many lenders have also predicated that the property market is likely to remain fairly flat for 2008; however some lenders have forecasted a growth of 2.5 percent.
The fluctuations in property values will vary across regional parts of the UK with new builds and luxury London flats amongst those that could be most hit.
According to Assetz chief executive officer Stuart Law "While we are currently experiencing a lot of negative sentiment in the property market, this is actually no reason to set the alarm bells ringing”.
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