The British Bankers Association had a nasty post-christmas surprise for the property market. New mortgage lending dropped by 43.5 per cent last month compared with last November. UK banks lent just £4.3 billion to homebuyers last month, £500 million less than October, more than £1 billion below the average over the previous six months.
There is a simple chain reaction at work here; no mortgage lending means no demand for housing. No demand means falling house prices.
YIKES - 43 percent down compared to last year. The UK property market is dead. What a start to 2008!
ReplyDeleteIt only means falling house prices if people decide to sell. What if they just sit tight?
ReplyDeleteSpeedtheplow,
ReplyDeletePeople have life changes that necessitate sells divorce,death,job loss,etc. These necessary sells set comps and bring surrounding property values down.