Monday, July 7, 2008

Oh dear, how many more people will be stuck on their lender’s SVR?

Are 95% mortgages next for the chop?

"UK house prices have fallen 6.9% over the last year, according to Nationwide, and you'd have thought that would be good news for potential first-time buyers as homes should now be more affordable. But sadly, for wannabe homeowners, while houses are getting cheaper, mortgages are getting more expensive. Last week saw the death of the 100% mortgage. This means no deposit, no mortgage -- simple as that. The situation is so dire these days that the best deals are usually reserved for those with a mighty 25% deposit. If the figures don’t add up, it may be a smart move to put off buying for now and save hard to boost your deposit. Who knows, in that time, house prices may have fallen even further, making dreams of owning your own home a reality."

Posted by drewster @ 06:21 PM (740 views)
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5 thoughts on “Oh dear, how many more people will be stuck on their lender’s SVR?

  • little professor says:

    SVR isn’t too bad these days, compared to the fixed rates on offer. In fact, up until about ten years ago, weren’t fixed deals generally higher than the SVR? You paid more in return for the security of knowing your monthly payments would not be changing.

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  • I was emailed this today, apparently appeared in FT Alphaville
    Written I understand by A fairly highly rated analyst called Mark Hake.

    I will post again tomorrow on a suitable article so everyone gets to read it.


    Sorry I don’t have ‘the charts below’ and the link to the article didn’t work in my email, but thought you’d all appreciate the above words from the article. If anyone can find the article please do post.

    Kind of backs up what I was saying earlier today here at No. 5 & 8. And I did write the words before I read the above – honest.

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  • stillthinking says:

    “Do it to Julia” is coming.

    1984. You would have thought New Labour would have read some books about social inequality.

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  • str 2007, thanks for that! I didn’t know there were three-year derivatives on the housing market, and I am surprised to see them so bearish already (remember a 33% drop == 50% rise). How accurate have the derivatives forecasts been in the past?

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  • Sorry can’t answer that one Drewster but these are people putting their money where their mouths are. – they wouldn’t unless they were pretty sure. They may be out by a few % either way but unlikely to be far out by the direction of price moves IMO.

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