Don't be fooled by the 'Bar room adviser' !

A report from the Halifax has suggested that house prices dropped in September by a huge 3.6%. According to the lender, the average price of a home in the UK is now £162,096. The fall equates to an average drop in price of £6,000.

Despite this disappointing, but unsurprising report, one National Mortgage Brokerage reported that mortgage applications were up 14% in September and numerous lenders have recently reduced rates, including the Coventry who reduced some products by up to 0.9%.

The Royal Institute of Chartered Surveyors (RICS) also reported an influx of new valuation instructions in September. RICS say this was due to homeowners testing the market ahead of further public spending cuts, or trying to sell before a possible deterioration in the economy.

Readers will appreciate that we regularly meet with all types of clients and endeavour to find the right mortgage for their particular needs. We are amazed how often clients advise us of the fantastic offerings which are apparently available according to 'a mate in the pub'. A story we recently heard about was the client who was selling and buying and who was advised by their 'friend' not to make the last two or three mortgage payments. Allegedly, it didn’t matter because they were leaving that lender anyway! Very worrying, totally incorrect and certain to place a big black mark on their credit file and stop any chance of getting a new mortgage!

Another recent instance included a client who was advised to surrender their life and savings plan early, when it was within touching distance of maturity. This has lost them the opportunity of a potential maturity bonus, the continuation of life cover and, in our view, there may have been other and better ways of making use of their plan when their full circumstances were known.

Qualified advisors have to stand behind the advice they give. Will you be able to sue your 'bar room adviser’ if the advice they give turns out to be faulty! I doubt it, so play safe and only listen to the professionals who have the qualifications to back up their advice and recommendation which will only be made after a full and thorough examination of your circumstances.