Monday, March 24, 2008
Crash is nigh
Small wonder that experts in the US predict another 10-15% off house prices there in the next year, adding to the 15% drop seen over the past year. A 25-30% house price fall in two years counts as a crash in anyone's book. The question is, of course, how bad can it get in Britain? We've already seen that lending to first-time buyers has slumped by a third since last summer while first-time buyer numbers have dropped to a record low. Lending to buy-to-let landlords is drying up too. After a decade that has seen house prices triple, banks are finally realising that lending up to 100% and more of a property that could soon be worth less than its purchase price is not terribly clever.