The majority of mortgages in the UK are in joint names, but it seems that old small print clauses from years gone by have not been removed. The clauses refer to the liability for payment of outstanding debts if a share of the property is used as collateral for a loan. The problem comes whereby the other party to the mortgage is unaware of the loan against the property.
It has emerged that the debacle which is Home Information Packs (HIPs) may have had more of an impact upon the housing market than first thought. Data from the last two months has shown an unexplained rise in the number of homes for sale, against historic trends and totally unexpected. Did the HIPs situation play a part?
While there has been little mention of repossessions in the housing market of late, that may well be about to change over the coming months. The repossession and fire sale of homes has long been a last resort for the majority of lending agents, but they may not be so shy in coming forward when the top of the property market is confirmed. If they are able to sell a property at the top of the market, they will receive more than enough to cover outstanding payments, and possibly leave some funds to be passed back to the original home owner.
A government sponsored think-tank has estimated that unless the supply of new housing is increased immediately, a home may cost on average ten times your income by 2026. While the report has taken into account trends in the property market and buoyant prices, the supply and demand factor is probably the most important point to consider.
As the property market continues to prosper it seems as though a number of elements will soon be coming together to derail this run away train. While interest rate rises are starting to have an impact, and a rising rate of inflation has increased living expenses, there may just be a sting in the tail to tip many home owners over the edge!
After months and months of successive increases in house prices, it seems that many of the UK’s mainstream mortgage lenders are finally taking stock of what could be a potentially dangerous stage of the economic cycle. Mortgage approval figures for April fell to the lowest level for 12 months with many market observers sensing a sea change in the attitude of lenders.
