UK Mortgage & Housing Market Set For Further Drops

UK Mortgage & Housing Market Set For Further Drops

The start of 2011 has not been an improvement for the housing market or the UK mortgage market. Britain’s everywhere are starting to feel to full extent of the coalition governments spending cuts. Already experts are predicting a 20% drop in house prices over the next two years.

Housing analysts are expecting to see a large drop in the price of property in the UK. Although the double dip recession hasn’t hit yet, many are bracing themselves for a double dip house price fall which will wide billion of pounds off the value of homes in the UK. Spending cuts and a weak economy together with public sector job losses and pay freeze has put added pressure on the housing market.

Although we haven’t seen to market crash which was expected last year, we are seeing a slow and sustained fall in house prices which could have catastrophic effects. Every day the news reports highlights new government cuts which will result in the second house price dip.

Some experts have gone as far as to say that UK homes are well over values with some evening putting a 30% figure on their estimates. It is widely accepted that there will be a downward price adjustment during 2011 which should see prices drop to realistic levels. This may be great news for those looking to get onto the property market but existing home owners will be worried of either falling into negative equity or loosing so much equity that their home loan will cost more the next time they come to re-mortgage.