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The Council of Mortgage Lenders (CML) has predicted that house prices will fall by at least 7% this year, expecting there to be 35% fewer property transactions in England and Wales than in 2007. In line with these predictions the Government has also predicted a fall of 5-10%.
The CML has also predicted that mortgage lending will half from figures in 2007, at around £55bn in 2008.
At the end of 2007 it was predicted by the CML that house prices would rise by 1%. However with the recent events of the credit crunch, the availability of mortgages has meant a revised prediction of a 7% fall.
Michael Coogan, CML Director General said, "In the wake of the credit crunch, 2008 will be remembered as a very weak year in the housing market."
Chief UK economist at Global Insight, Howard Archer, also predicted a 7% fall in prices this year. He warned,
"It is looking ever more possible that house prices will suffer double-digit falls both this year and in 2009 given serious buyer affordability constraints, limited and often more expensive mortgages available due to ongoing very tight lending conditions, a deteriorating economic outlook and reduced prospects for further interest rate cuts in the near term at least.
"Current rapidly deteriorating sentiment over the housing market also heightens the risk that house prices will fall sharply over the next couple of years."
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- What are Secured Loans?
A secured loan is a sum of money borrowed using property as security against the loan. This allows the lender to lower the risk involved for them. Should you be unable to keep up repayments you risk losing your home.
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- Is a Secured Loan the right choice for me?
A secured loan allows you to borrow a greater amount of money over a longer period of time than a personal loan. Typically they can be used for any purpose. As the loans are secured on property, they are often a more available choice to an individual who is otherwise unable to get a loan through a poor credit history. Self-employed individuals or those with bad credit history will be considered for secured loans.
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- What is the difference between a Secured Loan and an Unsecured Loan?
Secured loans – also known as homeowner loans, home loans or second charges – is a sum of money borrowed in addition to your mortgage. You can borrow any amount between £5,000 and £500,000 for any reason. To qualify for a secured loan you must be over 18, a UK resident and a homeowner. Secured loans allow the borrower to have more money, and for those with a poor credit history will give a greater chance of successfully getting a loan. You are securing your property against the loan, and it may be at risk should you fail to make the repayments.
Unsecured loans – also known as personal loans – are pledged against your name, not an asset. For this reason they are often more difficult to obtain than a secured loan because the lender is taking a greater risk. The decision to give you a loan will depend on your credit history, current income, and personal details. Personal loans will typically be up to £7,500 – depending on the creditors lending criteria.
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- Can I get a loan if I'm not a homeowner?
Yes. Unsecured loans, or personal loans, can be a viable option for borrowers who do not own their own property. Personal loans can be more difficult to get because the lender will look at your person details, monthly income, outstanding debt and credit history to determine whether you qualify for a loan.
You are securing the loan against your name, not your property, which means there is a greater risk for the lender as they’re not guaranteed to get their money back.
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- What is Payment Protection?
Payment Protection is insurance that covers your loan repayments. It gives you the opportunity to plan for unexpected events that may affect your income, and provides a safety net should your financial situation change for the worse. Payment Protection can cover inability to make repayments through sickness, unemployment or death. While it can offer great peace of mind to borrowers, it will increase your total repayments. This amount will vary from lender to lender.
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