Mortgage plan could lead to fewer buyers says National Homebuyers
Many homeowners may wish to seek a fast property sale before new plans to 'boost' the mortgage market are introduced.
[UKPRwire, Wed Mar 19 2008] It is being widely reported that Alistair Darling intends to introduce a kite mark system, whereby the best mortgages are given a gold standard.
Mr Darling claims that this will encourage investors to buy up mortgages from high street lenders but analyst MF Global warns that the effects could be dire.
Simon Maughan from the firm pointed out that this would encourage a divide between 'good' and 'bad' borrowers, potentially making it very difficult for some people to get onto the property ladder.
This could then lead to a downturn in house prices as demand wanes, with many homeowners potentially considering making a fast property sale before the change is introduced.
"Right now the price of a mortgage to someone with a big deposit and good credit rating is different to the price for someone with a smaller deposit, but not significantly so," Mr Maughan told BBC Two's Working Lunch programme.
"What may happen with this government proposal is that they drive a wedge between what is perceived as the good quality borrower and the less good.
"That will make it more difficult and more expensive for people with smaller deposits and potentially impaired credit ratings to get a mortgage in the future," he added.
Quick cash for homes expert Julian King adds, "The likelihood of fewer buyers is painful to the homeseller.
"As less and less buyers enter - or move within - the market, this has serious repercussions for the homeowner. The buyers have the balance of power and therefore property prices will continue to fall.
"Homeowners needing a quick property sale should consider a quick sale option like National Homebuyers to guarantee them a fast property sale".
Mr King is a director of National Homebuyers, the UK's leading quick house sale company which guarantees to make an offer on any property in the UK, regardless of its condition or location. The company is also the UK's leaders in Sell and Rent Back equity release solutions for homeowners who need to release cash in their home without moving.