There are concerns that the government is about to give the Bank of England significant powers in relation to the mortgage market. If this happens there is a risk that up to 40% of contractor mortgage applications would be rejected.
One of the major concerns is a proposal that putting down a 25% deposit would become a requirement for all house buyers. Although this is yet to be confirmed, there are real fears that such a move would ruin the housing market.
First-time buyers are already steering clear of the housing market and any moves to deter them further would be suicidal according to experts.
Mortgage holders are also concerned about possible interest rate increases with nearly half (46%) saying they would have financial worries if the rate rises. This figure came from a survey that also found that 7% of respondents would not be able to meet their repayments should rates increase.
Three quarters of all mortgage holders anticipate a rise in interest rates over the coming 12 months. 59% believe they could rise by up to 2.5% whilst 15% believe the rise will be in excess of 2.5%.
Next week’s emergency budget is also concerning the housing market as home buyers working in the public sector may be in danger of losing their job. Although repossessions for the last quarter of 2009 were significantly down on the 13,200 seen in the first, there are fears that widespread job losses in the public sector will lead to the number of repossessions increasing again.
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