The latest data from the Halifax shows a 2.4 percent drop in house prices for May 2008, making them 3.8 percent lower than they were in May 2007.
A house builder commenting on the state of the housing market right now felt it was quite depressed, with sales numbers well down compared to what was expected. They are forecasting sales down by around 15 percent compared with last year and when combined with lower prices as well the state of the new house market is precarious. The Halifax figures have been confirming this situation for the last few months so it has not come as a surprise to anyone.
What is making the property market harder to work in is the limited availability of home loan funds. The Halifax mortgage providers, as well as those of other financial organisations, are being more wary of who they lend money to. Larger deposits are required now as well as a whiter than white credit history, making it much more difficult for buyers to source the funding they need.
The Abbey National Intermediaries Division has just announced that it will be offering some exclusive mortgage deals for a number of selected partners.
The offers being provided by Abbey National vary from a low of 5.76 percent up to 5.81 percent, with at least a 50 percent deposit being needed for all the special mortgage deals available. A spokesman said that more offers like this would be released over time, dependent on the situation in the mortgage market at the time.
The Abbey National spokesman went on to say that this was a clear indication to the intermediary market that they are happy to lend money still and support for this important element of the mortgage market is very important to them.
In the future customers taking out an Alliance and Leicester mortgage will find a range of interest rates on offer depending on the amount of money they are putting down as a deposit.
Last week the Alliance and Leicester introduced their new stance on mortgages, with a maximum of 90 percent loan to value available. However they also introduced a lower rate when the customer can put down a 25 percent deposit, basically making it a more attractive proposition for the borrower and at the same time reducing their own risk exposure.
It has been argued that the 100 percent mortgages did a lot to create the housing market price increases, since people could simply borrow whatever was needed, without having to put down any of their own money. Those days are gone it seems, so the Alliance and Leicester stance may well be repeated by other lenders over the coming weeks.
