Property market takes desperate measures to prevent property crash damage

Lenders are capping lending in an attempt to avoid financial loss on mortgages.

New measures have been introduced by the UK property market to prevent damage to the economy and banks, caused by a potential crash. Homeowners around the UK are being affected by falling house prices, and lenders are now taking preventative action. The new system has been introduced by the property market to reduce the impact of a crash, should one occur. However, this involves lenders reducing the amount loaned out to borrowers.

The latest measures are being put in place following talk of an impending property crash. This will mean that lenders look at the property’s long term value, rather than the current inflated prices. The south east of England and London are particularly affected by over inflated property prices, where homeowners are experiencing a fall in house prices.

During an interview with the Financial Times, Rupert Clarke, of the Property Industry Alliance, stated that this is predictable, as every 15 to 20 years, the property market crashes dramatically, following a steep rise in values.

Experts had previously revealed that increases in property prices were slowing down in many areas of the UK, sparking fears of a looming property crash. According to surveyors, property in the south east and London are experiencing very little growth, if any at all.

Speaking to a mortgage advisor who has extensive knowledge of the industry after studying on a CeMAP course, will ensure that you find a mortgage which is affordable and suitable for your circumstances.



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