There was an element of doom and gloom in today’s Daily Mail, with economic forecasters predicting huge falls in house prices over the next few years, to levels below that of 2007. Some experts feel this is down to the cost of property in comparison to average earnings, which now stands at around 5 times income, much higher than the historic average of 3.7 times. Mortgage availability is also expected to be severely affected over the coming months as Government assistance comes to an end and lenders are forced to plug the £300 million hole.
The Financial Times also looked at predictions for the future, but on a more positive note reported that base rate is expected to remain at 0.5% until the end of 2013, making tracker and variable rates the cheapest option for many borrowers. Experts suggested that those comfortable with the forecast should secure an attractive tracker deal now and take advantage of low rates now by overpaying, which will stand them in good stead when rates do eventually rise.
Elsewhere the Express looked at whether it is better to buy or rent in the current climate, and also reported on the decision by the Lloyds Group to scrap the sale of Payment Protection Insurance (PPI).