| Topic: | Re:Re:Property sales | |
| Posted by: | Will Watson | |
| Date/Time: | 19/03/08 18:17:00 |
| The money that is not being lent by one institution to another is probably the biggest problem. They are all desperate to hang on to liquidity. The concern is that this will drive up the cost of mortgages irrespective of the lowering bank base rates. More expensive mortgages, weakening job market and no expectation of gaining equity in your home would trigger (as happened in the US) defaults on a large scale. This scenario would lead to a wholesale meltdown of house prices like we saw in the early 90s. An interesting new factor to consider is the large temporary population of EU workers. Once house prices are clearly falling the tendency to build extensions and perform refurb work to houses will reduce. The lack of work in this sector would lead to an exodus of our east European friends. This is turn would further weaken the demand for housing. Call me a pessimist but if you ask me now is the time to sell at whatever price you can get then stick any cash you get into a high interest account and live in a mobile home. Wait until the price of house you always wanted falls to what you can afford and then pounce. I don't buy the "the prices will never fall much because of the increasing demand" argument. The whole house price pack of cards in the UK is held up by a belief prices always go up. Once that belief is truly shattered watch the fall out. Mr Brown and his friends are largely to blame. |