Why losing your job need not mean losing your home – Telegraph Blogs
Government spending cuts and rising redundancies are likely to cause 10,000 extra repossessions next year, according to the Council of Mortgage Lenders (CML). But the Building Societies Association (BSA) predicts there will be no repeat of the 1990s housing slump because the State now provides much more help for homebuyers who lose their jobs.
Adrian Coles, head of the Building Societies Association (BSA), said there were four reasons homebuyers are less vulnerable than they were in 1991 when 78,000 properties were seized by lenders. Substantially lower mortgage costs, higher State benefits for homebuyers and better advice on debt management for borrowers and lenders mean the market is safer today than it was 20 years ago – despite house prices having soared since then.
Even a cut in the rate of income support for mortgage interest – reduced from a fixed rate of 6.08 per cent to 3.63 per cent in October – should not offset improved help for homebuyers and lower costs since then.
Mr Coles said: “Interest rates peaked at 15.4 per cent in 1990 but many lenders’ standard variable rate is now 5 per cent or lower. For example, Nationwide – Britain’s biggest building society – has an SVR of 2.5 per cent.
“Income support for mortgage interest was increased last year so that it can cover mortgages of up to £200,000 rather than the previous maximum limit of £100,000 and homebuyers need only wait 13 weeks for help rather than the previous minimum of 39 weeks.
What this means is high unemployment will not cause house prices to fall, and interest rates aren't going to rise in the UK until inflation is at least 10x the rate it is now.
Sorry Atw, you've got no chance of buying unless you can convince Google your search engine works.
Government spending cuts and rising redundancies are likely to cause 10,000 extra repossessions next year, according to the Council of Mortgage Lenders (CML). But the Building Societies Association (BSA) predicts there will be no repeat of the 1990s housing slump because the State now provides much more help for homebuyers who lose their jobs.
Adrian Coles, head of the Building Societies Association (BSA), said there were four reasons homebuyers are less vulnerable than they were in 1991 when 78,000 properties were seized by lenders. Substantially lower mortgage costs, higher State benefits for homebuyers and better advice on debt management for borrowers and lenders mean the market is safer today than it was 20 years ago – despite house prices having soared since then.
Even a cut in the rate of income support for mortgage interest – reduced from a fixed rate of 6.08 per cent to 3.63 per cent in October – should not offset improved help for homebuyers and lower costs since then.
Mr Coles said: “Interest rates peaked at 15.4 per cent in 1990 but many lenders’ standard variable rate is now 5 per cent or lower. For example, Nationwide – Britain’s biggest building society – has an SVR of 2.5 per cent.
“Income support for mortgage interest was increased last year so that it can cover mortgages of up to £200,000 rather than the previous maximum limit of £100,000 and homebuyers need only wait 13 weeks for help rather than the previous minimum of 39 weeks.
What this means is high unemployment will not cause house prices to fall, and interest rates aren't going to rise in the UK until inflation is at least 10x the rate it is now.
Sorry Atw, you've got no chance of buying unless you can convince Google your search engine works.
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