House prices have been forecasted to continue falling for perhaps the next five years by some analysts.  This is not good news for those homeowners that have little equity left to lose.  For many it could mean a danger of negative equity is lurking upon them.  For that reason, a lot of homeowners are choosing to wait for a remortgage and instead they are paying down debt.  Even for those without the threat of negative equity, paying down debt could help them gain a better remortgage deal.

Currently the market favors the buyer with many more properties coming to property and few buyers showing demand to make a purchase.  Of course, tight lending remains making it difficult for those wanting to purchase to be able to do so.  As this trend continues prices will continue a downward spiral taking homeowner’s equity down as well.

According to Howard Archer, chief economist at IHS Global Insight, the level of mortgage approvals were staying below the levels considered healthy.  According to the British Bankers’ Association data for April there were 29,355 approvals which was down from 31,205 in March.  There is a large gap from average monthly level of 57,644 that has been seen since 1997.

Mr. Archer remarked, "The relapse in mortgage approvals in April from an already low level reinforces our belief that modest falls in house prices are more probable than not over the coming months, as tighter fiscal policy and the possibility of gradually rising interest rates before the end of 2011 maintains pressure on the housing market.

"Consumer desire to get a tighter grip on their finances is a reflection of current very low and falling consumer confidence and is the consequence of an uncertain and somewhat worrying longer-term outlook for the economy and jobs as the major fiscal squeeze increasingly kicks in.  Meanwhile, there remains limited availability of unsecured credit from banks, despite reportedly increasing slightly in the first quarter."