Housing Market Hits Low
The housing market has hit its lowest level since the recession of 1990. The economic panic, a result of last fall's credit crunch, looks grim. This is putting pressure on the Bank of England to cut interest rates at its February meeting, according to Forbes.
"The very weak December RICS survey will heighten concern that the housing market is headed for a sharp correction in the face of stretched affordability, and tightening practices resulting from the credit crunch," said Howard Archer, chief UK economist at Global Insight.
The Royal Institute of Chartered Surveyors (RICS) said 49.1% more chartered surveyors reported a fall, rather than a rise. These figures are some of the lowest since 1992.
Doug Shephard, from Home.co.uk, said: "Looking at the recent monthly fluctuations in market prices, it is evident that too many sellers are still in the denial stage. The unpalatable truth is that in the post-crunch credit environment properties simply aren't selling at 2006/7 prices.
"We are currently witnessing a meltdown in the UK housing market, which is in danger of becoming an unstoppable out of control juggernaut, likely to lead to devastation across the economy. It is high time that home sellers quickly move from denial to acceptance, lest they chase the market down."
The media has been awash with predictions of a serious recession based on this one report. However, the industry does not predict 'doom' for the housing market. The drop in house prices is good for people who will remortgage over the next year. The drop in house prices will also lower the inflation rate with the hopes of increasing consumer confidence.
Published on January 21, 2008
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