To what extent has the credit crunch contributed to the fall in UK house prices?
We all know that the credit crunch has banks to blame for because of giving out massive loans without making a proper risk assessment. But are the goverment as well to blame for the credit crunch if yes then why ?
But mainly what i want to know is "To what extent has the credit crunch contributed to the fall in UK house prices" Thanks
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.
2 Responses to “To what extent has the credit crunch contributed to the fall in UK house prices?”
The fall in home prices is what caused the entire credit crisis. You have it backward.
Comment made on March 9th, 2009 at 2:35 amReferences :
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.
Comment made on March 9th, 2009 at 2:43 amReferences :
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