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This article is for information only. It does not constitute advice. Chase Saunders Ltd does not provide services for savings, investments, mortgages or insurance. You should seek advice on these areas from a qualified financial advisor.
Is Recession Round The Corner?
House prices in England are still swelling with no sign of letting up, prices last month (September ‘06) were up by 0.4%, this month was a staggering 0.6%. The largest increase since August 2004 has now pushed the average price for a house up to £169,600, London still leading the way with a rise of 1.2% and an average price of £245,000, now nearing the quarter of a million mark.
A multitude of things are affected by these increases, the obvious change is the lack of new buyers coming into the market, which makes the property economy top heavy. A risk to variable mortgage holders is the interest rates are bound to increase, this in turn adds to their monthly payments and in some extreme cases makes them unmanageable and the property is repossessed.
With unsecured debts in this country now at a exasperating 1.3 trillion, and no new buyers entering our toppling property market, a slow down in economic growth is about to happen, not that this is all bad. A slow down and consolidation is necessary in order for all non-growth sectors to catch up. More affordable housing needs to be erected and more prudent lending from banks will help us all become more frugal with our spending.
A warning must be sent to the bank of England though, if this growth doesn’t slow and stop plunging us into more debt, then a recession is going to engulf our economy once more.
Created on 11/12/2006 11:07:04
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