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Credit crunch: Now one in three housing deals falls through as lenders tighten up
Last updated at 12:21pm on 5th April 2008
Credit crunch: Now one in three housing deals falls through as lenders tighten up | the Daily Mail
Britain's is teetering on the brink of a house price crash after it was revealed one in three housing deals are falling through as lenders tighten their belts.
Cash-strapped buyers who have agreed on a house purchase are now finding lenders are either pulling out or finding the bank valuation of their house fails to match the price agreed.
According to website Moneyfacts.co.uk, the number of mortgages availabe has fallen 22 per cent compared to last week.
And tighter lending has led to transactions going down between 30 and 35 per cent, according to leading sales portal Rightmove.
Marc Goldberg, head of residential sales at Hamptons International, said: "The fall-through rate has gone up dramatically in recent weeks to around 35 per cent."
In a further blow, Halifax is to hammer mortgage borrowers who have only a small deposit by charging them up to £1,300 a year extra for their home loan.
From Monday, Britain's biggest lender is increasing rates for new customers seeking to borrow more than 75 per cent of the property's value.
Many will be existing homeowners wanting to move up the housing ladder, rather than firsttime buyers.
They will see costs on a typical £150,000 mortgage rise by £600 for a fixed rate and £384 for a tracker.
The move is another sign that the property market is being closed off to all but the most wealthy buyers.
The rate rise has sent shockwaves through the industry because Halifax lends to one in four of all mortgage borrowers.
Generally, other lenders follow its lead.
The customers hardest hit will be those who can pay a deposit of just 5 per cent upfront.
The majority of these will be firsttime buyers who will pay a rate starting from 6.79 per cent.
Meanwhile, those with a 25 per cent deposit or more will benefit the most.
They will have a rate of 5.62 per cent – a difference in repayments of £1,296 a year.
Halifax used to offer the same rate for anyone who had a deposit of 10 per cent or more.
Now it has brought in three tiers so that those with bigger deposits are rewarded with lower rates.
Its best two-year tracker rate has even been reduced for these customers because they are deemed to be lower risk.
As a result, they will pay £516 a year less than those whose deposit is not at least 25 per cent.
If you have just 5 per cent, then you will pay a further £780 a year on top of this.
Halifax spokesman Heather Scott said: "Our changes reflect the unsettled and volatile market that we have at the moment.
"We want to protect ourselves and protect our customers from these conditions."
Last updated at 12:21pm on 5th April 2008
Credit crunch: Now one in three housing deals falls through as lenders tighten up | the Daily Mail
Britain's is teetering on the brink of a house price crash after it was revealed one in three housing deals are falling through as lenders tighten their belts.
Cash-strapped buyers who have agreed on a house purchase are now finding lenders are either pulling out or finding the bank valuation of their house fails to match the price agreed.
According to website Moneyfacts.co.uk, the number of mortgages availabe has fallen 22 per cent compared to last week.
And tighter lending has led to transactions going down between 30 and 35 per cent, according to leading sales portal Rightmove.
Marc Goldberg, head of residential sales at Hamptons International, said: "The fall-through rate has gone up dramatically in recent weeks to around 35 per cent."
In a further blow, Halifax is to hammer mortgage borrowers who have only a small deposit by charging them up to £1,300 a year extra for their home loan.
From Monday, Britain's biggest lender is increasing rates for new customers seeking to borrow more than 75 per cent of the property's value.
Many will be existing homeowners wanting to move up the housing ladder, rather than firsttime buyers.
They will see costs on a typical £150,000 mortgage rise by £600 for a fixed rate and £384 for a tracker.
The move is another sign that the property market is being closed off to all but the most wealthy buyers.
The rate rise has sent shockwaves through the industry because Halifax lends to one in four of all mortgage borrowers.
Generally, other lenders follow its lead.
The customers hardest hit will be those who can pay a deposit of just 5 per cent upfront.
The majority of these will be firsttime buyers who will pay a rate starting from 6.79 per cent.
Meanwhile, those with a 25 per cent deposit or more will benefit the most.
They will have a rate of 5.62 per cent – a difference in repayments of £1,296 a year.
Halifax used to offer the same rate for anyone who had a deposit of 10 per cent or more.
Now it has brought in three tiers so that those with bigger deposits are rewarded with lower rates.
Its best two-year tracker rate has even been reduced for these customers because they are deemed to be lower risk.
As a result, they will pay £516 a year less than those whose deposit is not at least 25 per cent.
If you have just 5 per cent, then you will pay a further £780 a year on top of this.
Halifax spokesman Heather Scott said: "Our changes reflect the unsettled and volatile market that we have at the moment.
"We want to protect ourselves and protect our customers from these conditions."
