It would be ok if they were not remind by every newspaper and every news channel on land how many jobs are going to go and how many companies are facing close down. And these expert ‘commentaries’ almost always lead to the house prices.

When minor experts open their mouths to make predictions, we normally switch off. But when some one no lesser than the head of Barclays, which is one of the largest banks in the world, says that house prices will be down by another 15% from now (or 35% down from their peak in Aug 2007), we are bound to take notice.

It does not help even thinking about the countless people facing loosing their homes in by lenders. And the fact that many sell and rent back companies are not operating either (due to their inability to borrow or lack of desire in this market) has left many home owners short of even the possibility of staying n their homes after selling.

We just hope that the economy recovers sooner rather than later. Although this would mean that scores of people who contact us every day to sell their homes to us would not have any need to do so. But that is OK. Not that we can help every one of them but we would rather if people are not having to sell their homes under severe financial or other type of distress.

Financial markets think so. Because they are dumping the Sterling in favour of Euro or Dollar, thus weakening the Sterling. This will make exports dear (not good for jobs), imports cheap (not good for economy) and also make foreign holidays expensive for millions of Brits (again, not good overall).

Any doubts against this historic event have also been dispelled by the recent events indicating that the British economy is sinking into deeper recession.

The purchasing managers of all major manufacturers said in a survey that they are not ordering much stock as they do not expect orders going forward as they fear wide job losses and therefore shrinking demand for their wares. The construction industry is in as poor shape as manufacturing.

We will be officially in recession soon as the GDP contracted by 0.5% in the third quarter and is expected to contract by 0.8% or 0.9% in the fourth quarter.

As the Bank of England reduced rates recently from 5% on October to 2% last month, attention has naturally focused on how these rates are helping (or not helping) the borrowers. Recent figures released for October show that although the home owners benefitted from rate cuts (although marginally), the actual cost of borrowing has risen for the private or non-financial companies.

In reality the lending to individuals and companies has virtually stalled since the summer. The desire among banks to lend is non existent as they appear just short of shutting doors in the face of borrowers at the moment (see illustration).

Why all this despite the best efforts by the government and Bank of England to keep things moving? The reason is clear: overextended banks are fearing big loan losses and trying to shrink their balance-sheets as fast as possible. In other words they are keeping hold of their money and calling back as much as possible to avoid themselves going under.

This obviously will make things difficult for struggling companies or even thousands of home owners trying to stop repossession of their homes. Not just that, this may even tip some good and credit worthy companies or individuals, temporarily finding themselves in the tight spot, to over the edge too. This is something the govt and the Bank of England is desperately trying to avoid.

And this is the precise reason why the Bank may have to cut the rates to below its historic ceiling for the first time ever. And then the government will have to make sure that banks and other lending institutions pass on the rate cuts to end consumers. Else we are facing a really serious recession.

After all these are the extraordinary times we live in!

Illustration curtsey: The Economist

Is this going to lower the rates people pay on their cards? Unlikely. Despite the new code of conduct, companies have not been forced to lower rates. Some are still charging 15-17% interest on credit card borrowings despite the fact that Bank of England’s base rate is down to 2% now. OK, credit card companies have other overheads like sending statements, bad debts etc but even then the difference between what they can borrow at and what they charge does sound a bit high.

Can companies increase the rates?
Of course they can if they feel that you are riskier now than before. E.g if you are missing on payments or even paying minimum payments then they may feel that you are struggling, and therefore a risky prospect.

So what is this code then?
Basically the code of conduct says that all credit card companies will have to write to their customers with at least 30 days notice if they are to raise the APR. This is so that the customer can apply for a new card elsewhere if they wish. And they can do this only once every 6 months.

If you apply for a new credit card and accepted, the company can not raise the initial rate for up to one year from the sign up date.

If the company is to raise the APR and you want to go elsewhere then you can take reasonable period of time to clear the outstanding balance at the same old low rate. Previously you had to clear all the balance in full.

Now these restrictions (i.e. companies can’t raise rates for a year) may well mean that there ay not be as many 0% introductory rates any more. But that is companies’ problem.

How long is the ‘reasonable period’?
Sadly this is not clear yet and may depend on the company itself.

What if I am about to go on benefits?
If that is the case then you may require some breathing space. let the credit card company know and they will give you 30 (or even 60) days to sort out your benefit claims before you can start paying off your credit card debt.

Can companies make other ‘hidden’ charges to compensate for any loss of profits?
We hope not. If you pay off your balance in full every month then you shouldn’t need to worry.

However it is fair to expect that the companies will continue to penalise those who make late payments or exceed their credit limits. Even the Office of Fair Trading considers £12 to be a "fair" penalty charge for such misdemeanours.

I am struggling with several credit card payments. What should I do?
If you have several credit cards then try to move the balance to fewer and cheaper cards and cancel out the rest. You may seek an IVA (Individual Voluntary Arrangement) with some of your creditors.

You can even contact some of the following organisations for help or advice in arranging an IVA.

• Advice UK (020 7407 4070; www.adviceuk.org.uk)
• Citizens Advice (www.citizensadvice.org.uk) – Find Tel number for your local branch in your phone book
• Consumer Credit Counselling Service (0800 138 1111; www.cccs.co.uk)
• National Debtline (0808 808 4000, www.nationaldebtline.co.uk)
• Payplan (0800 917 7823, www.payplan.com)

I am a home owner and struggling with my mortgage payments. Can these organisations help me?
Probably not although you can ask. If you are considering selling your house then you can try your local estate agent However if you need to sell the house fast and also considering the possibility of selling and renting it back then you should contact specialist companies who offer such services. There are many but you may want to deal with a reputable company. One of them is Instant Angels.

• Instant Angles (0845 643 4183; www.instantangels.com)

NIESR is one of Britain’s largest independent economic research bodies. It says that the main problem government needs to address right now is the availability of bank credit.

Looking ahead, the Bank of England will have to take corrective action urgently. It may have to slash the base interest rates to zero per cent. So we may see another interest rate cut even as early as next month.

The base interest rates are currently at 2%. Last time they were this low was in 1939.

Mind you, the rates were 4.5% only in October. Bank of England has taken drastic action to slash rates in record time shows the urgency of the situation.

Zero per cent rates mean that Bank is expecting lots of companies going into trouble in near future. This will inevitably give rise to unemployment, raising questions how many home owners will be able to keep up with their mortgage payments.

Will lower rates help stop repossession of homes? That is more than likely. At least that is a bit of good news!

Estate agents sold only 10 houses on average in the last 3 months despite the Bank of England rate cuts, according to RICS. New mortgage approvals have been as lower in over a decade, if not lower.

After all no one can blame a lack of demand in housing sector or new mortgages. Unless people feel relatively confident about their job prospects, they’re unlikely to even try to obtain mortgage finance. And vendors still have to accept the inevitable fact that house prices are falling and re-price their property to suit current market conditions. Many home owners, uncertain of their job prospects are finding about more about the inevitable, like stopping repossession or sell and rent back schemes operated by many companies.

All this is reflected by the state of British economy – which is already pretty bad at the moment. Thanks to credit crunch, the Pound has dropped 25% this year alone – prompting deep rate cuts by BoE, to their lowest levels since 1951. The inflation rate is also low now, thanks to lower oil prices. Country’s economy contracted 0.5 percent in the third quarter this year and the central bank has predicted that the economy will contract further through most of next year.

More on this here

This has been claimed by RICS in its commercial property forecast published today.

Quote from the report says:

Rising defaults and credit spreads will constrain a near term recovery in financing, preventing any recovery in the investment market over the next couple of years,’ it said. ‘Low interest rates, recovering global growth and improving valuations relative to other asset classes should see the downturn gradually begin to reverse in 2011.

Mind you, the prices in commercial properties have already fallen 25% on average so far from their peak.

Why so much decline?

Businesses need to rent space for offices, factories, warehouses etc.  Banking, finance and insurance businesses account for the lion’s share in terms of renting property. And these industries are expected to experience decline in coming years. Their workforce levels are almost certainly expected to decline over coming years. And then there is retail, as many people are expecting any high street names to experience difficulties too.

This will mean that companies will not need as much office, store or factory space they have at the moment. This will undermine rent levels.

Commercial property is valued based on the rent yield. If rent declines, so will the value of property.

What does this mean:

It appears that we are only half way through the commercial property price correction. As owners become prepared to accept lower rents, price valuations of their will decline.  Of course, it will not affect those not selling. But people who have to sell, it will be a sad day.

Will this affect residential property?

Not directly. But he factors that affect commercial property valuation also, down the line, have a bearing on residential property values over all. Demand in commercial property will decline because companies can no longer afford them, and will have to let many workers go, giving rise to more unemployment. This will lead many home owners into financial difficulty. Which will undoubtedly have a bearing on residential house prices.

More on this story (external links):  RICS, Property Week

When the time comes to sell your house, you want to profit from it. As much as possible, the market value should be higher than its value years ago, when you saw it from the Gilbert Homes for sale ad. Many claim that the value of a property appreciates over time but this is not always true.

There are various reasons why the value of your property goes down. One is the change in its surroundings. If the location you picked a few years back slowly becomes a center of industrial activities, it will not become an appealing home for buyers, unless they are looking for a place of business. Another reason is the state of your yard. Buyers will not even bother looking at the inside of your house if it has an unpleasant picture outside.

The state of your house is also a big consideration. Damaged ceilings, walls, floors, faucets, bathroom, or other portions of the house are major turn off for the buyers. Other factors that affect the value of your homes are the status of the market, competition, the economy, and the buying power of the people.

It is important to maintain or improve the value of your house even if you do not intend to sell it. You owe it to yourself to have a decent place to stay. To reduce the risk of a decline in the market value, choose a very good location for your house. Make sure that it is in a residential area that is also accessible. If you are going to shell out some cash, invest it on a good house with a peaceful environment.

The best way to preserve your house is to take care of it. If something needs to be repaired, do it immediately. If you do not change your jammed door right away, it might become irreparable and you might need to change it all together, which will eventually lead to more expenses. Do not wait for the damages at home to become too much to handle. This will also ensure that you will have a comfortable stay at your house.

Do not let the clutter pile up in and out of your house. Aside from the hazards it poses, it will also prevent you from seeing parts of your house that needs repair. Remember to maintain the orderliness and cleanliness of your property from inside, out always. This way, you will not worry about restoring the house when the need arises.

The value of your real estate will change. Just like Gilbert Homes for sale, its market value before is not the same with its values today. You have to learn how you can maintain or enhance its value amidst the financial challenges that the economy will face.

Guest Author: Arizona based Chris Turley is an expert and professional real estate agent that will help you to find the perfect home that better fits your needs. For more information on Gilbert homes for sale, please go to http://www.ourbestrealestate.com.

UK Enquiries:

Visit these links to enquire about our sell and rent back service, to sell your house quickly or to stop repossession.

At the time of rescuing the bank, govt has demanded bank to make commitment to lend to homeowners and small businesses at 2007 levels. And now it has started to make sure that bank fulfils its commitment.

As the first step, bank yesterday announced that it will grant a six-month moratorium to home owners fearing, or struggling to stop repossession. In other words it will not take repossession action for 6 months. It is notable that many banks are too impatient and hardly wait a month. Govt want all banks to wait at least 3 months before starting the repo proceedings. Many people can sort things out after a temporary blip. But the impatient action of many banks forces people to sell their properties in a hurry, by getting in touch with sell and rent back or other sell your house fast type companies.

Government is taking keen interest in the lending market is a good sign. This is because HBOS, which owns the country’s largest mortgage lender Halifax, is also accepting a £12bn government rescue package soon. In another twist, Lloyds TSB will be taking over HBOS next year.

In other words, Lloyds TSB will become one of the largest lender in UK. And it will end up being 40% owned by the taxpayer. So if govt’s action with RBS is any indication for the future then HBOS, and ultimately Lloyds TSB can expect the same.

Government, it seems, is anxious and serious to get the economy back on track after the fall out fro credit crunch. Who can blame them – general election is only over a year away.

More on this here

Bank’s chief executive Simon Hester has announced in Financial Times this morning that if their customers are unable to re-pay their mortgages, they will be given six months before their homes are repossessed.

This surprising announcement came just days after the government (in other words the tax payer) owned 57.5% of the bank.

Full credit to RBS (which also owns NatWest Bank), they have gone one step further from government’s guidelines. Govt has asked banks to wait at least 3 months before moving to repossess a house.

In a nutshell, from today (1 December 2008), RBS and NatWest customers will be given the six month moratorium before repossession proceedings begin.

Even if the base rates are down, some home owners are still struggling in meeting their mortgage payments, or trying to stop repossession of their family homes. This announcement will certainly bring cheers to many faces. And who knows – other banks may follow the suit too.

Let’s hope so!

However there is some legislation called "Prevention of Homelessness Act", and it protects residents of England and Northern Ireland.

The general gist of the legislation is that if someone does not have anywhere to live, the courts can suspend the eviction to allow time for the individual or person to find another place of residence. The legislation also says that this does also apply to the circumstance of eviction due to mortgage repossession.

The application can be made by someone who is subject to eviction prior to action being taken

Where the home in question is inhabited as the person’s only dwelling the court has the power to suspend the repossession process for any period that they see fit. The way the legislation is worded gives the judge plenty of power to do what they perceive as fare in the circumstances.

The legislation stipulates that a court can decide to suspend the repossession for mortgage arrears or eviction for unpaid rent to prevent the person or persons residing there from "sleeping rough" or having to reside somewhere considered nor fit for inhabitation by humans

Another part of the legislation talks about variable rates of interest and gives power to the court to change the rate of interest that the individual is paying on the mortgage if that is a reasonable action to take to prevent the repossession taking place which would lead to someone being homeless.

There are some stipulations built in, however. The rate of interest that the court alters the mortgage to cannot be less than that applied by the UK federal Department for Work and Pensions

It also gives the court power to waiver any of the charges and fees or interest associated that may be a contributing factor to the repossession.

Everyone’s circumstances are unique, in order to make the best decision it always pays to seek expert advice.

If you would like FREE No Obligation advice about how you could stop repossession from happening then please visit our website and spare 2 minutes with out quick online form and one of our friendly advisers will be able assess and help you make the right decision.