After the property boom of the last ten years, first time buyers were finding the cost of housing increasingly difficult to afford. However, with the publicity surrounding the housing market and booming prices, banks were prepared to lend on almost anything regardless of income. The realities of whether or not borrowers could afford to repay the mortgage were largely irrelevant as even if the mortgage was defaulted on the bank would have made in a nice investment in a property which had increased in value far more than the amount of interest on the loan. This meant that repossessions were almost unheard of, and in a strange way, buy buying a house that you couldn't afford, and selling it 6 months down the line without having made a single mortgage payment could return a profit. In fact, the massively inflated prices that people were paying for properties was in many ways fuelled by the propaganda surrounding the price of housing with buyers believing that if they didn't act soon, the property would have gone up in value again.
Economists and experts have written and spoken in depth about how interest rates and a vibrant economy, the deficit of supply versus demand and the easy access to borrowing all fuelled the growth, but my question is - was it the propaganda that actually fuelled the growth and none of these things? Was the fact that people believed houses would increase in value the reason why they did? A self fulfilling prophecy?
Depending on what you read and see on television now, will depend largely on whether you believe the market has stopped growing, in a slight decline, or in freefall. I would question whether again, it is the propaganda surrounding the issue that is contributing more to any slump in the property market than any other factors. By predicting, in some cases 10 and 20% reductions in house prices, buyers are inevitably being scared away from the market, thus reducing the demand and making sellers more ready to accept lower offers. Again - a self-fulfilling prophecy?
My advice would be not to act too erratically. Home owners shouldn't be in a rush to sell because they fear their home will lose value if they don't do so quickly - this will only fuel the flames. Similarly, those living in a http://www.abodewithme.com'">house share
house share or renting should not fear buying for the prospect of house price decline - again, significant drops in demand will only make the prospects more gloomy.
Landlords may be those living in the most fear, especially if their buy-to-let properties are heavily mortgaged. However, the fact that buyers are more hesitant than normal should mean that there is still a high demand for http://www.abodewithme.com/PropertySearch.aspx
'">property to rent
