Prices must come down say National Homebuyers

It seems that the only way to rejuvenate the UK mortgage market is for sellers to drop their asking prices, potentially leading to a surge in people seeking a fast property sale.

[ClickPress, Thu Feb 21 2008] Capital Economics has commented on mounting speculation that the government may raise the stamp duty threshold to ignite the market.

However, the firm believes that this will do little to stimulate buyers and the only thing that will work is if house prices start falling.

This may cause more people to seek a fast property sale, in order to get as much money as they can for their properties.

"Surely what most aspiring FTBs [first-time buyers] really want are lower house prices. Someone with a £13,000 deposit, buying a property worth £130,000 would currently pay £1,300 in stamp duty and, assuming a six per cent interest rate, mortgage payments of £9,050 a year," read a statement from Capital Economics.

"Raising the stamp duty threshold to £140,000 would save him a welcome £1,300.

"But a five per cent fall in his purchase price, to £123,500 would also save him £1,300 in stamp duty, as well as lowering his mortgage costs by more than £500 a year," it continued.

Julian King, director of 'Buy My House Fast' property company National Homebuyers adds, "The costs of owning a property are now so confused with mixed messages from the media.

"One fact remains and that's the number of repossessions is increasing as homeowners default on their mortgage at a time when the lenders are getting tough on missed payments.

"Homeowners who are in - or are facing - financial difficulty need to act quick to avoid the worst".

Mr King is a director of National Homebuyers, the UK's leading mortgage rescue company. National Homebuyers arranges a guaranteed offer to purchase any property within days, regardless of property condition or location. It is also a pioneer of the Sell and Rent Back solution for homeowners looking for equity release.

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