Experts warn of price crash
Friday, 4th May 2007If house prices continue to increase, at this rate the UK property market might suffer a ‘boom and bust’ cycle, coming from a recent analysis by experts.
It is believed that although house prices may be slowing down and won’t go down too soon, it does go against the other belief that the property market is for now, stable in the UK.
The market could see falling prices due to quite a slow rise in house prices during 2005, which could be a reflection of the rapid rises in what it costs to buy a house during 2006.
People who have variable interest rate mortgages could be affected massively, by the boom and bust pattern which happened in the 80’s and early 90’s. On a lighter note it could mean that the cost of a property cannot keep rising.
This is only from reports by some experts that the market might be healthy for the time being, the boom and bust cycle is still a threat.
In the UK the cost of borrowing money is now 5.25% base rate of interest, set by The Bank of England. This change is said to be for another month, but by early May it could rise yet again.
Some lenders have begun to take away their fixed-rate mortgage products, as preparation for the possible rise by The Bank of England.
But this has made a lot of homeowners become worried, as their homes may be put at risk by another increase in interest rates.
If you are a homeowner and are worried about this, you could sell and rent back your home with Soda Estates and relieve some of the stress and risk, by releasing the equity within your property.
