Nationwide have released their house price index for June, which shows a surprising slowdown in the rate of decline. According to the index, the average house price fell by 0.9% in June compared with 2.5% in May. This leaves prices over 6% lower than this time last year, but still 4% higher than 2 years ago, with the average price now standing at £172,415.
Despite what you may have read, mortgages are still readily available for the majority of borrowers. However, lenders have withdrawn from the extremes of lending such as 100% mortgages, and we have started to see others restrict lending to 90%, as well as keeping their best deals for borrowers whose mortgage is as low as 60% of the property value.
It is impossible to predict what will happen in this climate, but if the combination of falling prices and tighter mortgage criteria continues, then it’s bad news for borrowers looking to remortgage.
Those who have a short term deal ending in 2008, and who borrowed a large percentage of the property value, could be most at risk so are well advised to consider applying to remortgage now. Most lenders mortgage offers are valid for between 3 and 6 months, and the valuation will be carried out before the offer is issued. This means that you are able to secure the deal you want now (cutting out any future tightening of the market), for use once your current scheme and any early repayment charge ends.