Lunchtime news Friday 25 April 2023

According to Savills, the estate agents, house prices could fall by 25 per cent if the credit crunch persists. However, a spokesperson said that if home loans were more freely available the fall could be reduced to around 6 per cent. Savills also added that the continuing shortage of homes in most regions will maintain higher prices. A divide is apparently opening between what Savills describe as the ‘super-wealthy’ and ‘merely wealthy’, with the latter fearing job losses and struggling to secure a home loan, whereas demand for house costing above £5 million is likely to continue ‘unabated’.

Abbey National is expected to reveal a 20 per cent jump in first quarter profits this week, to £270 million, after picking up mortgage customers from its rivals. It grabbed between 15 and 20 per cent of the UK mortgage market in the first few months of the year, compared to around 6 per cent last year.

And most banks have now effectively pulled the plug on new buy-to-let mortgages, while thousands of existing landlords will face huge rises in the cost of remortgaging. Abbey withdrew all its buy-to-let range leaving only a relatively expensive fixed rate deal; HBOS has raised its interest rates and arrangement fees for the third time in as many weeks; and Cheltenham & Gloucester, the fourth biggest lender in the UK, increased their rates for the second time in three weeks also.

Repossessions are set to soar 25 per cent according to research by the Centre for Economic and Business Research (CEBR). It believes that more than 33,000 borrowers will lose their homes once their fixed rate mortgages come to an end. With house prices predicted to fall by 10 per cent in the next two years and the number of transactions expected to decline by 25 per cent, a ‘rise in the number of repossessions’ will result.

And you know times are tough when instead of being gazumped, you’re being gazundered. Gazundering is where a homebuyer demands a reduction on the agreed purchase price at the last minute. A recent report by the Guardian has shown that some buyers are demanding as much as 20 per cent off the price, just before exchange, putting the whole transaction in jeopardy.