House price ‘correction’ of 35 per cent expected

The affordability of house prices are expected to correct themselves by 35 per cent, according to an economic expert.

Firstrung have said that inflation on property, “as a phenonmenon”, is over for the present generation of consumers.

However, some first time buyers who might have a good income are going to struggle in the wake of the credit crunch, despite having clean credit histories.

Paul Holmes, chief executive officer of Firstrung, said: “Last year first-time buyers watched prices go up on first-time buyer properties by an average of £19,000.”

“We’re now reverting back to the lending standards that the banks and building societies operated within in the 1980s. It’s become that bad.”

He estimated that prices will fall by 12 per cent over the course of the next year.

Just before Christmas it was announced by the Halifax that the average house in 96 per cent of towns are now not affordable for first time buyers, and that the number of first-time buyers was at the lowest level since 1980.

Tags: buyers watched prices, officer, price, Business Finance, Paul Holmes, first time buyers, house prices, cent

Borrowers paying too much interest

Britons are paying £9.3 billion too much interest through unsecured borrowing, leading to a worsening debt crisis.

That is according to Zopa, a marketplace for people to lend and borrow money from each other, which says that the majority of borrowers are being overcharged.

Zopa reveals that the end of 2006 saw every adult in the UK in debt to the tune of an average £4,611, with the money spread across credit cards, store cards, personal loans and overdrafts.

This is said to include £201, that the firm says is the average amount of interest which borrowers are being overcharged per year.

“The scale of personal debt in the UK is quite astonishing and the extent to which people are being ripped off by their banks, credit card and personal loan companies is simply outrageous,” said James Alexander, chief executive officer of Zopa.

“People in this country desperately need to start shopping around for a better deal. One of the best ways for people to take that important first step to getting their debt under control and managed properly is by taking advantage of the best interest rates available.”

Zopa claims to offer borrowers better deals by cutting out the banks in the whole lending process.

Those of you considering taking out a loan may find that borrowing in this way is attractive, however, the most important thing to do is to shop around for the best deal that suits your needs.

Tags: store, adult, loan companies, end, debt, officer, Unsecured debt, GBP