Economic woes seem to be piling up for the government and our UK economy which may be passed on to the housing market.
The current double dip recession may be thought by some to relate to the poor quality of the statistic (which wouldn’t surprise us). Equally it may be a further slide or downturn in the western worlds financial stability. Either way our double dip is causing untold fear and this is translating into renewed fears for the housing market.
Double Dip Effect on Housing Market
- The market is currently struggling and it is a significant step for many people to commit to a new house purchase in the uncertain economic climate.
- Weak consumer confidence and negative perceptions of the lending industry is whipped up in a negative manner by the media.
- A static price level for homes through 2011 was a real reduction in the value of housing when inflation of over 5% is taken into account.
- There is a fear that house prices will take a further dip in nominal or real house prices during the next couple of years.
- Previous recessions have led to real price dips and current house prices have not adequately corrected since 2006.
Double Dip Upside for Housing Market
- More optimistically there are more people in work than this time last year (although that will not help the unemployed).
- Interest rates are set to remain low despite the SVR changes at many lenders.
- Oil prices have played havoc in recent months and we may get some respite shortly.
- Housing demand is still high
- One of the first sectors to benefit from an economic upturn will be the construction industry and housing may help lead the country out of any Double Dip House Price problems.