House Prices in UK Continue to Fall

All this comes despite a high demand for housing, mainly from thoselooking to get onto the property ladder and so needing affordablehousing. In large part the situation has arose from the main UK banksreluctance to issue the necessary mortgages these first time buyerswill require, along with the high deposit. Not so long ago, credit wascheap and widely available to those who could perhaps not afford therepayments. It is this irresponsible lending which many, including thegovernment have criticised. As a consequence, banks have tightenedtheir lending criteria leaving many unable to secure the finances for ahouse.

During the 'boom' period of cheap, abundant credit, many took advantageand put aside cash into property as a financial investment. Whereasonce property investment had been seen available only to those withspare capital, people with regular incomes saw an opportunity forinvestment. This led to many more people taking on a second mortgage,which they may not now be able to afford. Buy to let mortgages have nowbecome much more harder to obtain, and rates for these mortgage holders haveincreased substantially, leading some to sell these properties quicklyat below market value.

Sadly, as yet, this situation is not improving (though it may bestabilising). Some believe the banks have become stringent with lendingpolicies, but it is more likely policies are 'normal' now as comparedto the free lending of recent years. The housing market is not likelyto start recovering on an upward trend until the economy as a wholeimproves, which could be two to three more years some analysts arepredicting.

Many feel the cause for the housing crash lays squarely at largecity banks which have set a trend for lending credit and mortgagesirresponsibly. Some feel tighter regulations should have been in placeto prevent the current situation and have asked serious questions ofthe government and regulatory authorities (such as the Financial Services Authority). Many feel that justice has not been served on those individuals and organisations who can be laid to blame for the present situation.

Unfortunately this is not encouraging news for those struggling withmortgage payments and other debts. The best advice for those facinghard times is to seek professional help either from a financial planneror organisation such as the Citizens Advice Bureau