Houses Prices 30 Per Cent Too High
The International Monetary Fund warned yesterday that house prices in the UK are 30 per cent too high.
For over a decade house prices have risen to almost 200 per cent in some parts of the country and the International Monetary Fund say it could soon crash with the UK experiencing one of the world’s ‘largest unexplained increases in house prices” during this period.
The average house price in 1996 was £60.000 and prices have rocketed out of control while at the same time average earnings have not kept up with the rising costs.
The asking price for an average house today is £196,000 but according the predictions of IMF in reality it is only worth £137.000.
Homes in the South East which have reached astronomical prices of £400,000 could now drop to £280,000.
Britain is now one of the most vulnerable countries that could be heading for a price collapse and the Bank of England has added fuel to the ‘worry’ fire by warning the mortgage meltdown is going to get even worse.
Some mortgage lenders have already closed the door to first time buyers and many more are expected to follow along the same path. Mortgage deals have collapsed by 70 per cent since the start of the credit crunch that crippled the country’s lenders last year.
Second Jobs for Most Families
Survey reports carried out by Axa found that families have to work harder and longer hours, with up to 15 per cent taking on second jobs to pay the rising costs of the household bills and mortgages and over 70 per cent are cutting back on spending.
Mothers are finding it harder to be ‘stay at home’ mums and many women are working from home to bring in what extra they can to help towards the household income.
Over 1.1 million men have two jobs and figures of 13 per cent show a rise from 583,000 to 655,000 of women now have to cope with a second job.
Tory spokesman Philip Hammond, said: "Reading between the lines, the Bank of England is telling us that 'we ain't seen nothing yet'.
"Hard-pressed British families are going to pay the price of Gordon Brown's economic incompetence as the credit squeeze bites further on an ill-prepared nation."
Sales of Houses Dropped
In England and Wales house sales have dropped by 40 per cent between 2006 and 2007 while in Scotland sales have dropped by 16 per cent.
Expert are warning that the situation is likely to get worse as the mortgage squeeze starts to bite and even though there is still a big demand for mortgages, bank and building societies are unwilling to give them as freely as before or as some already have done, stopped them altogether.
Yesterday business market showed the decline in mortgage deals with 4,754 being on offer at the beginning of the day to end with a figure dropped to 4,329, according to the information firm Moneyfacts.
LibDem spokesman Vince Cable said: "We are in the nightmare scenario where banks can't lend and people can't borrow.
"The UK economy has been running on little else than the wide availability of cheap credit for several years.
"With lending now drying up, there is a real danger this will have a serious impact on growth in the economy."
Lenders are saying that even more mortgage deals will disappear while those remaining will become more expensive. This could truly mean the end of the line for first time buyer!
