According to the Abbey National falling house prices may be an interesting opportunity for some homeowners who can see the chance to get a bigger property at a smaller price.
The figures held by Abbey National indicate somewhere in the region of 2 million homeowners are considering a move as house prices drop. Around 1.2 million of these people are hoping to trade up to a larger house, feeling they will get a relative bargain.
As a spokesman for Abbey National Mortgages reaffirmed, a market where house prices are falling is not always bad news. It creates opportunities and bargains that some people can make the most of.
The Abbey National has announced rate cuts on their two and three year fixed rate mortgages of up to 0.15 percent, the second round of cuts in the last 10 days.
The lowest 2 year fixed rate Abbey National mortgage can now be had at 6.34 percent, with a fee of GBP999, while the equivalent three year offer is just 6.29 percent. These mortgages require at least a 25 percent deposit to qualify.
Soon to be breaking the 6 percent barrier is a new Abbey National mortgage with a 5.99 percent rate, though the maximum loan to value will be 70 percent rather than the usual 75 percent. This will be for a three year fixed term and has a fee of GBP1,695, with a maximum loan value of GBP250,000.
The latest Halifax house price report showed a slide of 1.7 percent for the month of July, taking the overall decrease for the year to date to 8.8 percent.
A Halifax spokesman said that increasing demands on consumers income as well as much tighter mortgage lending criteria is making it very difficult for people to get into the market, with a natural decline in prices to try and stimulate interest.
On the topic of mortgage approvals, which really drive the housing market, they are down by almost 70 percent compared with the same time last year according to Halifax figures. This leads to the real market, that is those who can finance a move, shrinking considerably and in many cases almost cutting off completely the first time buyer.
