Homeowners were warned in this weekend’s financial press to expect another drop in property prices after the forthcoming election. The Times reported that, whatever the outcome of the election, the next government will be forced to cut spending dramatically to deal with the public sector deficit, which is likely to lead to rising unemployment and another wave of mortgage shortages. Experts advised that First Time Buyers could be at risk as availability becomes restricted later in the year, and those remortgaging were urged to keep an eye on house prices and their Loan to Value. The Financial Times focused on the current mortgage market this weekend, revealing that while building societies are unable to compete with banks on ‘plain vanilla’ deals due to limited funding, they are instead leading the way in more innovative products including higher Loan to Value deals and capped rates. There was praise for lenders such as The Mortgage Works and their new range of ‘Limited Liability’ products, under which a guarantor is only financially liable for 30% of the debt plus an additional 10%. Brokers welcomed new deals such as these for adding something new to the First Time Buyer market. Elsewhere there was news of Tesco’s new iSold service, which offers a basic online agents package for a fee of £999. The package includes a valuation, property description, photographs and listings on big property websites, as well as acting as middlemen for negotiations once viewings have taken place. The main attraction for many homeowners struggling to sell their property is the fact that the price undercuts most estate agents fees of 1.50%-2%. In protection news, the FT revealed that premiums for Level Term Life Assurance are now 20-30% lower than they were 10 years ago, and experts suggested that most policy holders won’t realise they are now paying over the odds. Once again the advice was to shop around, although consumers should ensure they are comparing like for like before switching.
What the papers say- 13th and 14th March 2010