House price crash UK 2008

Now house prices in the UK have finally crashed by around 30% or over one third in some areas of London, it appears the writing was on the wall since around 2006.

Foolish lenders are responsible!

• Stupid lending of income multiples
• Self cert mortgages allowing virtually anyone to buy as many houses as they wanted with only a 10 to 15% deposit, regardless of proof of income
• Dreamer buy to let investors looking for a quick buck
• Sub prime lenders lending at rates people cannot afford - mortgages and secured loans with high rates and high fees.
• Scum bag mortgages brokers looking for commissions encouraging people to overstate their incomes to get on the housing ladder

Reasons for the house price crash include:

1. People with bad credit histories living beyond their means and re mortgaging and getting big secured loans at high sub prime rates have defaulted on their mortgages
2. Buy to Let landlords have flooded their properties onto the market as they fear that they will not go up in value any more and their rental yields are too poor
3. The credit crunch in the USA have made banks and building societies reluctant to lend, and very reluctant to lend to sub prime borrowers and high loan to value borrowers
4. First time buyers have all but disappeared
5. Legislation for landlords have forced them to make improvements to their properties that their rents cannot cover
6. Personal bankruptcies are at a record high as the amount of unsecured borrowing people have taken on cannot be serviced.

Creditcrunch 'may hit UK and USA growth and house prices' 
 
Less cash available for take over scams could hit the economy Economic growth in the UK and USA may be as much as one percent lower in 2008 and 2009 as a direct result of the sub prime credit crunch.

The longer term forecast, based on a "worst case" predicted there was a chance that the turmoil would not be contained within the financial services community.

But it added here were "worrying signals" that it could spill over into the High Street shops and UK housing market.

"Nurse maiding" by central banks in the USA and Europe may help minimise damage, the paper said.

Vulnerable

The sub prime credit crunch has followed woes in the USA sub-prime mortgage lenders, which specialises in loans to people with bad credit histories or with no provable income.

Rising interest rates have led to very high levels of loan defaults and house repossess ions - and that has sparked fears about which mortgage lenders might be exposed to the escalating bad debts.