Mortgage will ruin thousand British
29 June 2008More than 23 000 Englishmen, who have taken the mortgage from the beginning of year, continue to lose money. Falling of the prices for the real estate means unprofitableness of investments in hypothec habitation as cost of the house, got in such way, becomes below the sum, which the borrower should give to the bank.
Data of Hypothec creditors’ council show that rates of growth continue to decrease in the housing market. The quantity of transactions has fallen to one agent up to the lowest mark for last 30 years. For last 5 months real estate has lost in the price about 6 %.
These data have forced banks to toughen requirements to borrowers - now they reluctantly give out loans and refuse clients without initial payment as the risk of outstanding credit is very high. For the borrower loss in cost of habitation doesn’t seem such a serious problem while the owner will not face necessity of leaving the house, when he will not be able to pay the percent under the mortgage.
Data show decrease in a segment of sale and purchase, where very small quantity of people have replaced habitation - for last 3 months on each agency hardly has more than 17 transactions. However, it is not the end - up to the end of 2009 experts predict even greater falling in prices.
