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By David Stevens Personal Finance Correspondent
Thursday, 21 August 2008
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A staggering 123 homes are being repossessed every day according to new reports as the fear of a nineties-style negative equity crisis begins to loom large, reports David Stevens.
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WITH the glum news that repossession orders are up by a staggering 24% - potentially exacerbated by overly aggressive lenders - comes a glimmer of good news in the form of further round of mortgage rate cuts from a clutch of the UK’s biggest mortgage lenders.
The Halifax is leading the way by cutting many of its popular tracker rate mortgages by an average of a quarter of a percent.
The mortgages do require a deposit of 25% however.
Swap rates
Halifax’s rate cuts are riding on the back of the recent cut in what banks term 'swap rates'.
'Swap rates' are the rates at which banks borrow from one another.
Other banks joining the rush to cut their headline mortgage rates to below 6% include the Yorkshire Building Society and even Northern Rock.
According to the BBC, another bright spot on the horizon is the trend of other lenders to increase the number of mortgage deals they offer.
Slackening the reigns
The Woolwich is one such lender slackening the reigns on the number of mortgages they offer, with Coventry building society, Britannia and Bristol & West following suit.
While the cost of loans has come down even for customers only able to put down a 10% deposit, the best offers are for those able to put down very large deposits – as much as 50% of the property’s value in the case of the Coventry building society.
Analysts are predicting cheaper fixed rates to follow in the forthcoming weeks but all this is too little too late for the 28,658 home repossession orders made in the last three months.
Worse to come?
And there is worse to come. The Council of Mortgage Lenders (CML) is predicting as many as 45,000 will be repossessed before the end of the year.
The CML is urging people to contact their lender as soon as possible if they feel they cannot keep up with the payments as there are a range of options employed by lenders to help homeowners who run into difficulty.
These could include reducing or rescheduling payments for a period.
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