Paula John: Market news
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Student savers. Average student debts may be rising, but a surprising number of undergraduates say they are already saving up for a deposit on their first property. Research from Abbey Mortgages reveals that 42 per cent of students are already building up a down payment, while 19 per cent are saving to fund a gap year travelling. It seems that property prices are clipping youngsters' wings – Abbey also claims that one in 10 graduates who have taken a gap year in the last decade say that they probably wouldn't have made the same decision today, given the cost of buying a home.
GOING DOWN...
100 per cent mortgages. With tightening market conditions caused by the ongoing credit crunch, mortgages that let you borrow 100 per cent of the value of your home are harder to come by. More lenders are returning to the traditional approach, demanding that borrowers show some kind of commitment to the loan they are taking on – ie, a deposit. The website Moneyfacts calculates that 10 lenders have withdrawn 100 per cent mortgage deals since last June. Still, 22 lenders offer no-deposit mortgages – but you'll need a squeaky-clean credit rating, and some are limited to graduates and certain professionals.
GO FIGURE... £4 TRILLION
The total value of the UK's housing stock has reached a record £4,000bn, according to Halifax. That is a 9 per cent increase in 2007. We own £2.8 trillion worth of the equity in our homes, with £1.2 trillion owing in mortgages. Halifax figures show that, as a nation, the value of the residential property equity has grown by more than the amount of debt in mortgages every year since 1995. This explains why we have been feeling so prosperous. Indeed, housing now accounts for 41 per cent of all our wealth, compared to 27 per cent a decade ago – making any potential fall in property values all the more painful.
Paula John is editor-in-chief of 'Your Mortgage'
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