NATIONWIDE PLAYING LOW-RISK FOOTBALL
By: Andrew Curtin
Yesterday, news broke that Nationwide, the UK’s second-largest mortgage lender, is ditching their 5% first-time buyer deposit, now asking first-timers to cough up an additional 10%, bringing the total deposit to 15% according to Money Expert.
The drastic change comes down to one thing, negative equity! The building society reported a 1.7% decrease in property prices for May, the worst monthly fall since Feb’ 2009.
“As a responsible lender, Nationwide needs to ensure borrowers can afford mortgage payments and are, as much as possible, protected against the potential for negative equity, should house prices decrease … Our priority at this time must be to help members keep their homes” said Henry Jordan, Nationwide director of mortgages to the BBC & Money Expert.
Hopefully, that London flat will be still on the market by the time these rates come back down. But hey, nothing wrong with renting. Especially in times like these.