This week saw figures released which showed house prices have fallen over the past year and also predictions that prices will continue to fall for the next couple of years. At the same time Barclays has joined other lenders in offering deals which require only a 10% deposit.
House prices fall over the past year
Data released by the Land Registry has shown that house prices in England and Wales have fallen by 2.6% in the year to September.
According to the Land Registry prices fell in September by 0.3% and the average house is now worth £162,109.
Despite the falls the London housing market bucked the national trend, properties in the capital rose in value by 2.7% over the past year. The north east showed the largest fall with a reduction of 8.2% over the past year.
House price predications
This week has seen both Capital Economics and estate agent Frank night predict a gloomy future for house prices.
According to Capital Economics house prices will fall 5% next year and by the same amount in 2013.
Capital Economics have a reputation for offering bearish house price predictions, however Frank Knight also agree. The estate agent believes there will be little growth over the next couple of years and by 2015 house prices will have fallen by 29% from their peak if inflation is taken into account.
Both Frank Knight and property website Primelocation.com have warned that the market is becoming segmented both by property size and along geographical lines. Frank Knight, for example have predicted an average fall of 5% in property prices next year, but believe the London market will rise by the same amount.
New high loan to value mortgage deal
Through its mortgage arm, the Woolwich, Barclays has re introduced mortgage deals for people with only a 10% deposit.
The move by Barclays follows similar offerings from Northern Rock and HSBC earlier in the year, and comes after their withdrawal from high loan to value lending three years ago.
Mortgage experts believe that rates offered by the Woolwich are competitive when compared to other deals from large lenders.
Many people believe that tight mortgage lending criteria and the need for large deposits are two reasons for the slowdown in the housing market, experts therefore welcomed the addition of the Woolwich to the list of lenders offering deals at 90% loan to value.
Andy Gray, head of mortgages at Barclays, said: “As one of the UK’s largest lenders we recognise the importance of supporting the first-time buyer market, which is why we’ve committed today to extend our lending to 90%.”
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