London house price falls 'raising spectre of negative equity'
Those thinking of buying a house or flat in London will continue to find it difficult to do so, an expert has noted.
Michael O'Flynn, content editor at FindaProperty.com, explained that lenders are still restricting finance for mortgages.
And although an interest rate as low as three per cent would normally encourage people to buy, he added that this is not the case in the current market.
Mr O'Flynn observed that even those banks that pass on base rate cuts may ask for larger up-front payments in order to recoup their losses.
"Lenders are asking for much larger deposits and falling prices raise the spectre of negative equity," he said.
A recent study by Hometrack revealed that house prices had dropped by 1.3 per cent in the UK in October, contributing to a 7.3 per cent decrease over the last 12 months.
Those wishing to avoid the possibility of negative equity that can come from such falls may wish to consider renting instead.
Published 14th November, 2008
© 2008 Estates IT Limited
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Those thinking of buying a house or flat in London will continue to find it difficult to do so, an expert has noted.