Today’s Daily Express revealed how new legal guidelines, coming into force on November 19th, state that lenders must explore options to help people stay in their homes. These may include extending the loan term, changing the type of mortgage by perhaps switching to an interest-only deal, deferring payment of interest, or adding arrears to the overall loan. If a case reaches court, lenders must reveal how they complied with the protocol. The Times reported that some 1.2million households could fall into negative equity if the housing slump continues, the Bank of England said. Its twice-yearly Financial Stability Report, the Bank said that a 15 per cent drop in prices from their October 2007 peak would have one in 10 homeowners with outstanding mortgage debt. Elsewhere, the Daily Mail noted that times are getting tougher for borrowers who have only 10 per cent equity or deposit for a mortgage. Plummeting property prices are wiping out the equity that homeowners had previously built up in their houses and pushing more borrowers on to higher loan-to-value mortgages. The Daily Mirror had some positive news for would-be homeowners, who apparently have a much better chance of buying next year. House prices look set to fall further, while interest rates-and therefore mortgage rates-could be one or two per cent lower by spring.
What the papers say - 29th October 2008