House prices continue to tumble
House prices in certain parts of the UK are continuing to tumble according to a recent report from the Royal Institute of Chartered Surveyors.
Figures show that the West Midlands, East Midlands and East Anglia are amongst the hardest hit when it comes to house price falls according to the figures. Many of the members of the Royal Institute of Chartered Surveyors reported falling house prices in their areas through September, and this situation had been predicted by many industry officials who are expecting the market to grow increasingly subdued over the coming months.
Experts have stated that the downturn in house prices in certain areas is down to a combination of factors, and this includes the expansion of Home Information Packs to properties that are above two bedrooms, the series of interest rate rises that have taken place over the past year, and the financial turmoil to hit the money markets, which has led to more stringent lending practices and higher inter-bank lending rates. Many experts are also expecting the market to take a further hit as a result of the nation's fifth largest mortgage lender, Northern Rock, cutting two thirds of its mortgage products following the recent chaos.
One spokesman from the Royal Institute of Chartered Surveyors stated: "A major correction in the market seems unlikely while economic growth is above trend and employment conditions remain buoyant. The combination of rising interest rates, the introduction of home information packs (Hips) and volatility in the financial markets resulting in tightening of lending criteria, has certainly affected the confidence of buyers and sellers."
A spokesman from the Council of Mortgage Lenders added: "As lenders move to price for the risk they are taking on, mortgages are set to become more expensive for customers who have poorer credit histories."
20th October 2007
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