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Cheap mortgages will not last forever

April 21, 2010

Cheap mortgages will not last forever

Cheap variable mortgages may tempt homebuyers to spend too much putting themselves in financial jeopardy, warns an expert.

Timothy Lambert, head of consulting at Ducalian, acknowledged that it may be a favourable time to buy property.

However, Mr Lambert was sceptical about the market bouncing back as green shoots begin to appear.He advised homebuyers to carefully consider location, value, comparables, track record and history before making a purchase.

He expressly warned buyers not to "stretch themselves financially". Mr Lambert added: "Whilst a variable mortgage may be cheap now, it will not stay that way forever and buyers must be aware of this before biting off more than they can chew."

The National Association of Estate Agents (NAEA) has published data stating that housing sales per branch had increased to an average of eight in March, upfrom 6.8 in February.

Although, the data showed a decrease in first-time buyer purchases to 23 per cent in March, down from 24 per cent registered a month before.

March also recorded the highest housing stock, with more properties available for sale per branch.

Eighty one per cent of homeowners expected house prices to rise in the next six months, achieving a 5.7 per cent increase by October this year, according to a report by Zoopla.co.uk.

Despite the confidence returning to the property market, 78 per cent of the respondents still felt that it was difficult to obtain a mortgage, the same study found.

House prices have shown a seven per cent growth, with London prices increasing to 11.9 per cent in the past year, according to land registry figures published in March this year.

The average house price dipped by 0.3 per cent to £164,455 in February, while house prices in London fell by 0.5 per cent to £333,394.

This article is intended as generic information only and is not intended to apply to anybody’s specific circumstances, demands or needs. The views expressed are not intended to provide any financial service or to give any recommendation or advice. Products and services are only mentioned for illustrative rather than promotional purposes.

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