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Housing Market is still on a downslide

Housing Market is still on a downslide

10th March 2009

According to the country's surveyors property sales in December, January and February are at a 31 year low. Further more house builders believe house construction may reach a 88 year low.
This gloomy news is reported despite a rise in enquires by new buyers as house prices decline and become more affordable.

The dramatic interest rate cuts have stirred up more interest in a more affordable market however the high deposit demanded by the mortgage lender is still holding back the majority of buyers. A fifth of all mortgage products on the market require a 40% deposit with many other mortgages requiring at least 25% deposit.

Other mortgage products are drying up, for example, the Self Certificated mortgage offers have almost completely disappeared therefore restricting many self employed buyers who have no way to prove their income.

It is believed that without some sort of government intervention prices will continue to fall much further. This will, of course, open up more affordable deals for first time buyers but will have a hard impact on existing borrowers as more and more people fall into negative equity on their current loans.

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