The First Time Buyer, Debt & 2008

Writing by Paul on Monday 21 January 2008

10% Drop in House Prices

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A third successive month of falling house prices brings the average UK house price to £230,428. Whilst this is not good news for those on tight budgets who may be hoping to release equity from their homes as a means to consolidate debt, it will help those looking to buy, especially for the first time home-buyer.

Miles Shipside of Rightmove said:

Some properties have had their prices dropped by 10% or more and are now within reach, satisfying some of the pent-up demand from previously disenfranchised buyers.

UK Recession?

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Although a recession is thought to be an exaggeration of the current economic climate, there is a widely predicted UK economic slowdown for 2008, which may further help first-time buyers being able to afford their first home. A slowdown would lead to a re-adjustment of economic growth following several years of continually rising house prices and increased consumer spending, funded largely by credit cards, personal and secured loans and re-mortgaging to release increased equity levels in property.

Further Interest Rate Cuts?

Further cuts in interest rates will also help first-time buyers, as well as those coming off their current mortgage deals who are at potential exposure to ‘Mortgage Shock’ (where payments increase dramatically at the end of a current fixed year deal). A recently released Ernst & Young ITEM Club report states interest rate cuts would be helpful:

We have been living well beyond our means, lured by the offers of cheap no-questions-asked credit. The reversal in the credit markets in 2007 could lead to a sharp fall in economic growth, but we believe there is room for interest rates to be cut to cushion this.

Free Debt and Mortgage Advice

For those who are unable to find a better mortgage deal, unable to re-mortgage to help pay their debts or who are simply struggling to meet their commitments on credit cards or personal loans, Payplan can offer free financial and debt advice.

Call Payplan free on 0800 917 7823 or submit you debt details online for a response within 24 hours.

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