Negative equity warning
LONDON (Reuters) - The number of 100 percent mortgages has almost doubled in the past six months, despite volatile money markets and signs that house prices are starting to fall, data shows.
People looking to borrow the full value of a property can now choose from 160 products, up from 92 in April, according to online mortgage company mform.co.uk.
A total of 22 lenders offer 100 percent loans, ranging from high street names such as Abbey, Scottish Widows, Standard Life, Bank of Ireland and Cheltenham & Gloucester to regional building societies including the Tipton and Ipswich.
But with firm signs that Britain's property market is coming off the boil, house-hunters without deposits run the risk of negative equity.
Halifax, Britain's largest mortgage lender, said on Thursday that house prices unexpectedly fell last month for the first time since December.
They dipped 0.6 percent in September, down from a downwardly revised 0.3 percent gain in August and well below forecasts for a 0.4 percent increase, its index showed.
Rising interest rates and a global lending squeeze have been expected to weigh on house market sentiment and the latest decline in prices will encourage the view that interest rates could fall in the coming months.
"The rise in the number of 100 percent mortgage products available demonstrates that lenders believe there is a genuine demand," said Francis Ghiloni, marketing and business development director at mform.co.uk. Continued...
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