It’s ‘crunch time’ for the UK housing market claimed the Financial Times this weekend, with brokers warning that a prolonged drop in house prices could make lenders jittery about lending at higher loan to values (LTV’s). The debate over the future of house prices continued in the Telegraph and Independent on Sunday, both of which highlighted the changes across different areas of the country, and predicted difficult times ahead for homeowners in parts of the North and West – many of whom are already in negative equity and could suffer further from falling prices and cuts to public sector employment. First Time Buyers also got a mention this weekend, with the Sunday Telegraph reporting that Coventry Building Society has become the latest lender to stop offering interest-only loans to those buying a property for the first time. Criteria has tightened greatly across the board in recent times as regulators put pressure on lenders to act responsibly, but experts expressed concern that forcing existing borrowers to move to a capital and interest mortgage is unrealistic. Elsewhere the Sunday Times gave advice on cutting food, energy and mortgage bills, with brokers recommending long term fixed rates to avoid getting caught by rising rates. Split loans and droplock deals were also mentioned as becoming more popular with borrowers unsure over what to do.
What the papers say- 14th and 15th August 2010