To What Extent Has The Credit Crunch Contributed To The Fall In Uk House Prices?

2 Responses to “To What Extent Has The Credit Crunch Contributed To The Fall In Uk House Prices?”

luludood Says:
October 3rd, 2009 at 12:48 pm

Government allowed/encouraged excessive house price inflation to a point where first time buyers could not afford to buy houses thus bringing house buying to a halt as “chain” broke at lowest level.
Buy to Let purpose built (inflated price) flats in city centres were overpriced (on the basis that a house buy was a guaranteed investment so buy quick!) also stalled.
Government policy had prevented building enough houses to satisfy demand so prices rose way above sensible levels!
When the banks started losing money on sub-prime investments they cut back on most UK housing loans as they could see huge negative equity loans developing on UK mortgages.
UK prices have dropped 16% in last year with 15% more this year projected.

AB Says:
October 3rd, 2009 at 1:03 pm

The fall in home prices is what caused the entire credit crisis. You have it backward.

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