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Reports about house prices keep making the news, with a common strand of falls in values. The general consensus is that the situation is now mirroring the early 1990s, when the term 'negative equity' came into prominence with mortgage debts for many people greater than the value tied up in their bricks and mortar. Currently, figures issued by the government indicate house prices falling by £270 a day; this in itself is likely to depress the housing market when delaying purchase for two months could knock £15,000 off the value of the property.
The Royal Institute of Chartered Surveyors suggest that cuts in the interest rate are necessary if the market is to be stabilised, and many estate agents who contributed to the RICS survey also claimed that Home Information Packs are responsible for some of the damage, with a serious reduction in the number of homes coming onto the market.
There is little if any sign of cheer in the current situation. Reductions in interest rates have been expected to ease the strain for home buyers, and yet moneysupermarket.com say that despite this, the rates charged to anyone taking out a fixed rate loans is unlikely to decrease until more confidence returns to the markets. This is bad news indeed for anyone who might be waiting for the rate cuts to materialise before taking out a new loan or mortgage as increased fees or worsening deals could easily offset any rate cuts before they arrive. Pressure is reported to be increasing for a series of cuts to ease the strain on mortgage payers, especially those moving off discounted starter rates.
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