Paula John: Market News

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The Independent Online


The number of people relying on credit cards to keep a roof over their heads. According to a report published by the homeless charity Shelter, four million homeowners and tenants are taking out cash on their credit cards to pay their mortgage or the rent, up from one million a year ago. The statistic indicates just how desperate many people's financial situations have become – using your plastic to access cash is one of the most expensive methods of borrowing. Any mortgage borrower pushed to such extremes should speak to their lender immediately and explain their situation.


The number of first-time buyers getting on to the property ladder could sink to a record low. If trends continue, fewer than 200,000 buyers will move in to their first home this year; this compares to 358,000 last year and would constitute the smallest number since records began in the late Seventies. First-time buyer numbers peaked at 600,000 in 1999, but escalating prices have deterred many purchasers. Now that property prices are falling, many potential first-time buyers are still unwilling to enter the market – and those who do wish to buy are struggling to find the finance.

GO FIGURE... £166,999

Loss sustained by one flat owner in Leeds. A three-bed flat in a new development, which was bought for £237,999 in March 2006, has just been sold for £71,000, according auctioneers Essential Information Group (EIG). EIG reports that, on average, new-build flats sold at auction lost 26 per cent of their value between January 2005 and February this year. Thousands of buy-to-let investors in Leeds, Manchester and Newcastle face substantial losses, because oversupply of new flats in these areas means they cannot find tenants to fill their properties – forcing them to sell at a loss or face repossession.

Paula John is editor-in-chief of Your Mortgage