Credit Crunch Not All Doom and Gloom
24 July, 2008 | Web design
Speculation about falling house prices in the UK is rife at present, with officials from various related industries making their predictions.
According to a report from the Nationwide Building Society stated that after ten years of enjoying a housing boom, it saw in May house prices tumbling by 2.5%. This being the largest monthly fall recorded by Nationwide since 1991, making house prices 4.4% lower than they were this time last year.
Peter Bolton king, Chief executive of the National Association of Estate Agents (NAEA) believes, "There is no denying that the credit crunch has affected confidence in the market - especially first time buyers who are finding it hard to find financing to get on the ladder- but it is still important to remember that the underlying factors that support the property market remain: low unemployment, historically low interest rates and a pent - up demand for houses. Therefore, rather than a dramatic fall that some doom and gloom merchants are predicting, it shows we are looking at a return to a more steady market rather than the fantastic prices hikes we have seen in the previous 10 years."
Local Government and The Department of Communities state that, "When looking at trends in the market, it is important to remember that UK house prices are 39% higher than five years ago. The current issue affecting the market is fundamentally about the supply of credit -a very different situation to the early 1990s which was about high interest rates and unemployment."
The Royal Institute of Chartered Surveyors states that, "The difficulties in the mortgage Market are stretching accessibility and threaten to reduce transaction levels By 40% this year. With buyers unable to secure financing on reasonable terms, Some sellers are now choosing to cut prices. The market will only stabilise once transaction volumes recover. The government and the Bank of England should continue to implement measures to restore the smooth functioning the mortgage market, before the drop in transactions and prices begins to really hurt the economy."