Archive for February, 2008

The Royal Institute of Chartered Surveyors (RICS) has stated that the Bank of England needs to cut interest rates as early as possible in order to avoid a housing market meltdown that could be similar to that seen in the 1990s. Many had expected the interest rate to be cut in January but the base rate remained unchanged.

Officials from RICS have stated that further interest rate cuts this year were crucial in order to try and avoid a house price crash. The latest RICS survey was ‘maybe the worst we have had in 17 years’ according to one estate agent.

Speaking of the interest rate cut that was applied to the base rate in December, one estate agent said: ‘The quarter point reduction was welcomed but we need more to follow in the New Year if the early 90s property recession is to be averted. If we don’t, the country can expect a bleak time for the next two to five years.’

There are a number of factors that have affected the housing market, and this includes lack of affordability from would-be buyers, tighter credit conditions because of the credit crunch, and the controversial Home Information Packs. One official said: ‘Home Information Packs plus Christmas plus interest rates plus credit crunch equals hard times.’

There are a number of deals that are short lived just now and the thriftyscott suggests acting quickly to take advantage of them:

Homeowners that are looking to remortgage to a cheaper deal in order to save money are being urged to take action earlier rather than later, with experts stating that many competitive mortgage deals are only staying on the market for a short space of time, putting the consumer at risk of missing out altogether.

Lenders have apparently been putting some competitive mortgage packages on the market, but they are disappearing in a matter of just a couple of days in some cases according to reports. This is either because the lender claims that they have sold out or because the lender cannot afford to offer these deals for longer periods.

With interest rates having fallen again a wider choice of lower rate deals may appear on the market in the coming weeks, and homeowners that want to remortgage should make sure that they keep their eyes peeled and do not delay when they see a good deal.

It has been revealed that some remortgagers who have delayed have ended up having to sign up to a more expensive remortgage deal as a result of the lower cost deals being taken off the shelves so suddenly, which has caused unnecessary expense for the borrower.