Property Rescue Blog

Unemployment figures released this week show 1.79 million people out of work in the UK (measured between May and August 2008); the highest number since the 1990s.  This figure is expected to increase to 2 million by the end of the year, with many analysts predicting further rises during 2009. 

The construction industry has been hard hit as work slows or stops completely on new builds throughout the country.  As well as affecting those directly involved in building trades it has a knock on effect for suppliers and manufacturers.  Additionally, the manufacturing sector – already weak in the UK – has recorded an all time low in the number of people it employs.

The UK is a nation of small businesses, many of which are sole traders or employ under 10 staff.  It is these that are affected most immediately when work dries up.  Without large asset value or access to funding they can find themselves in a cashflow crisis that can bring them down within a few months or even weeks.  This is compounded by the fact that nervous banks are reluctant to renew loans or allocate new investment, especially to businesses that are struggling. 

For every ‘statistic’ whose business goes under or who is laid off due to lack of work there is a personal story of hardship.  Many of these are homeowners with mortgage payments that become difficult – or in some cases, impossible – to meet.  The minority will have insurances that meet the cost of mortgage interest, but those who default on their repayments will increase the burden of an already serious problem for the lenders.  As unemployment rises there is sure to be an increase in the number of repossessions taking place.  With house prices continuing to fall, some lenders will find themselves having to accept a sale price that is lower than the outstanding mortgage.

At a difficult time for homeowners it is reassuring to know that there are options open, even when the situation looks bleak. 

Lenders will encourage you to talk to them about making different arrangements whereby you can meet your payment obligations.  For example, they may be prepared to lengthen the term of your loan, or accept smaller (or interest only) payments for a period of time until you get back on your financial feet.  Always communicate with your lender when times are hard.  They will be much more responsive to you at this stage than if you bury your head in the sand until the situation is critical.

If you simply can’t meet repayments, you might want to explore other options that will allow you to stay in your home.  There has been some negative publicity about the less reputable companies that offer buy and rent back schemes.  Property Rescue has a sound financial backing.  Their experts have years of experience in many aspects of the property market and will explain all the options to you clearly before you make any commitment.  If this is an area that you want to explore, then explore it with Property Rescue.  Valuations of your property are free and there is no obligation to proceed. 

Call for more details about how the scheme works.

Looking back a few months no one would have predicted that an interest rate cut would be made on a global scale, but that’s exactly what happened this week as world financial leaders reacted to the ever deepening crisis in this dramatic move.

The rate cut of half of one per cent came on the back of the UK government announcement of a rescue plan for banks and a guarantee to savers in the collapsed Icelandic bank, Icesave.  The nationalisation of Northern Rock, the bank debt guarantee, the short term loans that will be made to the banks and a treasury cash injection all add up to an astonishing £500 billion.  Part of this sum is classed as investment on which – if the markets recover – the government will earn bonuses, but as every investor knows, losses can be made as easily as gains.  Where this leaves the financial markets, the debt of the tax payer and the overall wealth of our country, only time will tell.

In the short term, the most pressing need for hard pushed home owners is a cut in their mortgage rates.  But will the banks pass the rate cut on to their borrowers at a time when their priority is to attract and retain savers?  Some banks did respond immediately to the Bank of England’s rate cut on Wednesday.  Lloyds TSB reduced the rate of its standard variable mortgage to 6.5%, to take effect from the beginning of November; no news yet on tracker rates for new customers although existing tracker mortgages also benefit from the cut.  Others making similar responses to their standard variable rates included Barclays, Halifax, Natwest, and the Woolwich.  At present it looks as if savers might benefit from the banks’ need to attract investment, but only time will tell whether savings rates will remain high.

Despite these dramatic measures the crisis of confidence is far from over.  In normal times, a rate cut of half a per cent might be sufficient to boost house sales, but these are far from normal times.  Uncertainty and nervousness are the key factors affecting not only stocks and shares, but people on the high street.  That includes those who want to sell or buy property, with only the brave few venturing out into a turbulent market.

‘For Sale’ boards are a common sight but the ‘Sold’ board is fast becoming an endangered species.  If you cannot sell your home but you need to move, give Property Rescue a call.  Despite the economic downturn they will give you a guaranteed offer for your property, regardless of its condition or location.  Should you accept their valuation and subsequent offer, the sale will go through in a matter of weeks or even days.  In a time of uncertainty it’s good to know some things don’t change!

Call Property Rescue for a free, informal chat with no obligation.