The corporate credit crunch is getting worse. Over the last three months, lending to firms fell by over 6 percent (on an annualized basis). UK banks are simply abandoning firms in favour of other clients.What kind of recovery does this imply for the UK economy? A weak, jobless one.
AS long as the banks keep supporting house prices we have nothing to worry about.
ReplyDeleteThe housing market is real engine of the UK economy, and long shall it remain so!
Once the cash from equity withdrawal and property investment profits start to be spent with vigor again, business will get a boost. The gov't and bank of england know this...their approach is 100% correct.
"AS long as the banks keep supporting house prices we have nothing to worry about."
ReplyDeleteMate, you aint going to see house prices at the 2007 level again in your lifetime.
BinMan,
ReplyDeleteWhere I am they ARE back at 2007 levels already. Over the last few weeks local EAs have been repricing properties up to +30% or more.
The streets are full of sold signs again...its like the crunch never happened!
2/10
ReplyDeleteI very much doubt it.
ReplyDeleteEstate agents can price them 1000% higher, it doesn't mean anyone is going to purchase them.
30%? so thats 15% higher than 2007. I wonder which banks are supplying the mortgages, (isn't due diligence high on the banks priority list at the moment?) or is everyone paying cash down your street.
House prices have risen slightly in the past few months and people have bought thinking they're getting a bargain.... but thats why it's called a sucker rally.
anon@16:09
ReplyDeleteSo why did your perpetual motion machine come to a grinding halt and go into reverse in 2007 and why wasn't it predicted by it's supporters?
There just next to no decent properties available in desirable locations.
ReplyDeleteRecession/mortgage drought irrelevant. Plenty of people with cash to keep prices up. If the banks start throwing money around again prices will rocket.
How far can the bottom gets? The crisis shouldn't be this long. We could only hope for the better.By the way, I know a real estate coach who could also help many in the real estate industry make money despite the current crisis.
ReplyDeleteBritain has fully completed its bifarcation in the past two years. There is international Britain - high pay, nice houses and neighbourhoods - and loser Britain, bankrupt companies, living on benefits, crummy housing and neighbourhoods. If you want to thrive and have a nice life in contemporary Britain, you better go international. If you want to spend your days crying into your pint of bitter with Frank 'Shameless' Gallagher, then sit around waiting for Labour to save your sorry ass.
ReplyDeleteSorry, big mistake here. It is NOT UK banks not lending; it is the rapid withdrawal for foreign capital that UK banks cannot replace quickly enough.
ReplyDelete