Economy Downturn

It doesn’t matter what angle you look from, at a distance it all looks the same. The U.K is in a deep recession and it is affecting everybody one way or another, homes are being repossessed and people are looking toquick property sale companies for help. Steve Martin our property expert will be giving his views on how the recession started and how long it will be before we get back to the good times.

We will be updating our blogs giving the public a realistic view surrounding the credit crunch, economic downturn and the global financial crisis.

Today’s topic.  

The reason for the U.K recession?

In my opinion, it seems that things get forgotten too easily, and when the economy has been so good for so long, people believed the boom and bust was a thing of the past. We have just had 16 years of consistent growth and the tide has been coming in throughout this time, our employment levels were at there highest, steady consumer spending and also borrowing, and at the same time the government were doing the same thing. Therefore placing the country in more debt and spending more money. The economy has basically been unbalanced, mainly because investments and exports haven’t been reaching expected levels.

House prices & freeholds were constantly increasing, and people believed that it would continue to do so, but unfortunately apart from the buy-to-let market there was very little that was fueling the market. Investors were making money on the increasing values on their investment properties, and continued to purchase property even thought there was no profit being achieved on their rental income. The credit crunch produced an instant change to the views of every buy-to-let investor, and because good buy-to-let mortgage deals disappeared, unless you had a very large deposit, buy-to-let investors seemed to disappear overnight. To make it worse they flooded the market by trying to achieve a quick house sale of their investment properties. Remember, the buy-to-let investor, was the last thing that was fueling the ever increasing house prices, and now that the investors are no longer in the market place the tide is on its way out.

Also see:

Economy downturn part 2
being repossessed
selling freehold
quick house sale