A few scary reports this week have indicated that a crash in house prices in the UK may be in our immediate future.
There is evidence of the lowest mortgage approval rate in ten years and both the Halifax and Nationwide indicate that a drop in prices has already begun. Even more frightening Ernst & Young have said this week: “The housing market clearly looks as if it is heading for a double dip.”.
The problem seems to be that without cheap credit to prop them up UK house prices are no longer sustainable at their current prices. Without much access to credit, buyers are unable to push the prices up or even, it seems hold them up.
On the bright side many experts are arguing that the dip, if it comes, will not be dramatic. The fact that other indicators such as the repossession rate are still low is a good sign.
And David Hollingworth, from London & Country has this, more cheerful, opinion to add: “The market’s not going to drop off a cliff. Just because Halifax says it’s down 3.6% doesn’t mean it is going to stay that low. If you look at different indices they tell you different things. “
Overall the evidence suggests a dip but maybe not a dramatic one and hopefully not for too long.
