Daily Mail - 17.08.2019

Daily Mail, Saturday, August 17, 2019 Page 47

pricing 95 per cent deals, making

them very attractive.

‘The concern is that those mak-

ing decisions at banks are blinded

to how house prices can fall as

well as rise, or are perhaps too

young to remember a time when

house prices have fallen drasti-

cally. Any home buyer taking out a

95 per cent mortgage runs the risk

of falling into negative equity.’

The cheapest two-year 95 per

cent fixed rate on the market is

currently 2.59 pc from Newcastle

Building Society. Many will have

taken advantage of the Govern-

ment’s Help to Buy scheme, which

lets home buyers borrow 20 per

cent of the purchase price inter-

est-free if they can put down a 5

per cent deposit.

But house price growth has

slowed, with prices now falling in

many parts of the country. Lon-

don and the South East have been

worst hit but other regions have

also been affected.

The average price of a house in

Barnet has fallen 11.6 per cent

from £544,994 to £481,824 in two

years, according to the Office for

National Statistics. It means bor-

rowers with a 95 per cent mort-

gage taken over 30 years would

have seen their debt in relation to

the value of their property rise to

106 per cent, assuming they were

paying the average two-year fixed

rate in 2017, according to mort-

gage broker Coreco.

In Harrow, house prices have

fallen by almost 8 per cent, and on

a low-deposit mortgage homeown-

ers here would now have just 0.6

per cent of equity in their homes.

Jane King, a mortgage adviser at

Ash-Ridge Private Finance who

helps families buy homes in Sur-

rey, Berkshire, Hampshire and

Central London, said she sees

eight to ten examples a month

where families who bought homes

with a 5 per cent deposit two years

ago now have around 2 per cent of

their equity left.

She added: ‘I try to encourage

buyers who have only saved a 5 per

cent deposit to save more if they

can. A 95 per cent mortgage should

be an absolute last resort.’

CONSUMERS spent almost £17billion on credit

cards in May, a 2.3 per cent increase on the

previous year, according to the latest figures

on unsecured borrowing.

The statistics from the banking trade body

UK Finance showed almost 300million trans-

actions were conducted with 62million

credit cards, up by 6.5 per cent on the same

month a year earlier.

The average family owes £3,900 on cards,

with the total up by two-fifths since 2009,

Bank of England figures show. In April banks

reported a ‘significant increase’ in custom-

ers defaulting on credit cards.

Rachel Springhall, of data analysts Money-

facts, said: ‘Not only are consumers spend-

ing more using their credit cards but out-

standing debt is rising too.’

Personal finance expert Sarah Coles said:

‘Sensible credit card spending has turned

into something more worrying as plenty of

people are maxing out cards.’

By Samantha Partington

Money Mail Reporter

FIRST-time home buyers who

bought properties with a 5 per cent

deposit just two years ago could

now be in negative equity.

The popularity of low-deposit mort-

gages has soared, helping hundreds of

thousands buy their first home, but

prices have now fallen in more than 50

regions across England since 2017.

Borrowers who bought homes with 95 per

cent mortgages in these regions could now

find their debt is worth up to 6 per cent

more than the value of their property,

despite two years of repayments.

If the debt exceeds the value of their home,

they can find themselves unable to sell up

or get a new loan, leaving them stuck on

expensive rates once their fixed-rate deal

expires. Almost one in five mortgages

Brothers are

both champs

at board game

THE word is out – two young broth-

ers have become world and Euro-

pean Scrabble champions.

Reuben Moisey, aged 11, won 12

out of 13 games to claim the Euro-

pean youth title in Romania, gain-

ing the highest score out of all

under-18 categories.

His best-scoring word was ‘zani-

est’ – earning him an impressive 120

points. Brother Joshua was already

the word game’s under-eight glo-

bal champion after winning a tour-

nament in Dubai. Both boys and

their parents Alvin and Hiroko,

from Penge, south-east London,

flew to Romania where Joshua,

now eight, scooped the title for

best European player under ten.

Mr Moisey, 56, a professional

pianist, said: ‘It’s wonderful, I can

hardly believe it has happened.

‘I am very proud of them and

don’t know what to say – I am lost

for words. We play together at

home and it is a challenge to keep

up with my own children.’

The brothers will take part in the

world Scrabble championships in

Torquay later this year.

By Inderdeep Bains

‘I’m very proud

and lost for words’

Little men of

letters: Joshua

and Reuben

Moisey with

their parents

The negative equity

nightmare returns

‘We’re almost back to

pre-2008 days’

£17BN ON CREDIT CARDS IN JUST A MONTH

Blow for first-time buyers with 95% mortgages

issued in the first three months of 2019 –

some 38,000 loans – were to borrowers with

less than a 10 per cent deposit. This is the

highest level since before the financial crisis

struck at the end of 2007.

John Azopardi, a mortgage adviser at New

Leaf Distribution, said: ‘We’re almost back

to pre-2008 days, the way some banks are