Property Outlook

New affordability tests have been proposed which will severely restrict the use of interest-only mortgages, making it harder for first-time buyers to get a home loan.

From next year, lenders will be forced to check every borrower’s income bringing to an end the toxic practice of ‘self-certification’ mortgages which fueled the property bubble.

The availability of mortgages for first-time buyers with small deposits has in any case already dwindled since the end of 2007.

It could be a blessing in disguise as a growing number of economists are predicting a sustained fall that could last for up to a decade and shave up to 25% off prices.

PricewaterhouseCoopers warns that the slump could be prolonged with a growing likelihood that it will take till 2020 for the market to surpass its pervious peak.

Advertisements

%d bloggers like this: