December, 2007 News:
House prices in the capital are falling, and have dropped by an average £28,000 in the last month alone, as experts warn of a property-led downturn in investment affecting the economy next year.
By David Stubbs
Senior Economist with Royal Institution of Chartered Surveyors (RICS)
Over the last decade investing in property has been a hugely profitable strategy. Those who bought investment properties in 1996 were purchasing an asset with a gross yield of more than 9% financed with borrowing at interest rates below 7%.
Many UK homeowners with patchy credit histories may be forced to put their properties on the market next year, as lenders get tough.
The Council of Mortgage Lenders (CML) warns that, due to the recent credit crunch many homeowners will face higher mortgage payments.
Many homeowners will have been relieved by the Bank of England decision to cut interest rates by 0.25% to 5.5%, but money experts are warning that it ill take some time for the benefits to trickle down to homeowners. The reason is that banks are currently lending money to each other at 6.65%, which is […]