Wednesday 30th April 2008
First-time buyers (FTBs) may have had little reason to celebrate recently, with interest rates not falling as quickly as predicted and lenders restricting access to high loan-to-value mortgages.
However, Nationwide has unveiled figures which could put a smile on some faces, as property prices have finally begun to fall year-on-year - for the first time in 12 years.
While the one per cent annual decline may not be enough to send FTBs down to their local estate agents just yet, it equates to an average decrease of £1,759 per house.
Existing homeowners may not find the news to be as negative as the headline figures imply, according to a Nationwide spokesperson.
Chief economist Fionnuala Earley explains that 5.5 million borrowers remain on fixed-rate deals, allowing them to ride out the current turbulence in both interest rates and the market as a whole.
"It is easy to forget that the majority of borrowers are not taking out loans today," she asserts.
"Indeed, most mortgage borrowers have either not been affected by recent market events or have directly benefited from cuts in the Bank Rate."
The one per cent annual decrease in house prices is reported alongside a monthly decline of 1.1 per cent, bringing the typical valuation to £178,555.
Nationwide recently announced a package of benefits aimed at helping FTBs on to the housing ladder.
They included a £300 discount on mortgage reservation fees and £100 to cover legal costs.
FTBs were reminded by the financial services provider that its mortgages cover loan-to-value ratios of up to 95 per cent with no higher lending charges.
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