The British housing market still operates.

The British housing market still operates. Houses still have for-sale signs. There are also cash purchases, which do not need mortgage finance. It is unfortunate that two main lenders Northern Rock and Bradford & Bingley are limping along. However, the Nationwide points out that house prices are still 10 pct higher than they were three years ago.
Yet, Liberal Democrat Shadow Chancellor Vince Cable notes that the housing market has been seriously overvalued for some time thanks to massive consumer debt in a quote to
moneymarketing.co.uk.

The housing market is crucial to the UK economy and I am surprised that stamp duty has not been cut to help sentiment. British Chancellor Alistair Darling should have carried out a cut at the March budget since it would have been quite a powerful signal. He perhaps does not have the money at his disposal but a cut then would have been more helpful. The quoted UK housebuilders are going through a torrid time.
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British housing market bust?

Are we going to see a British housing market bust? The housing market has certainly frozen up with the lenders tightening their criteria. For instance, there are no more
100 pct plus loans and we have not really felt the knock-on effect of Northern Rock and Bradford & Bingley hitting trouble. The missus' share stake in B & B has such a forlorn value that I have to wonder when the shares will ever recover.
www.searchifa.co.ukFirst-time buyers should be helped by a reduction in stamp duty but a thoughtful article (sorry harrowing article) in the New Statesman says that nobody should be considering a property purchase at the moment. I suppose we just have to sit out the next two years but the Labour Government has always wanted a buoyant housing market for the feel-good factor during general elections, so 2010 anybody?
Northern Rock could hit a real financial mess if the housing market goes down and the Government now probably wished that it was not so picky about Lloyds TSB. Northern Rock is also undermining the stability of the housing market through its shrinking programme. It might make perfect sense to force customers to go elsewhere but not if there is not much of an elsewhere to go to.

John Wriglesworth predicts possible fall in housing market.

Money Marketing cites economist John Wrigglesworth, who predicts that the UK housing market could fall by 50 per cent. He says that if lenders return to lending at
a multiple of three times income, then housing prices could drop by 50 per cent,
returning to their level of early 2000. This was when lending criteria began to
be loosened.
Wrigglesworth, who is managing director of Wrigglesworth Consultancy, says the British government has to inject £350bn into the mortgage market through the Bank of England special liquidity scheme. He considers the initial £50bn pretty paltry.
I suppose this is the time to batten down the hatches. The number of transactions has dropped sharply and I wonder what the government will do since it will want to go into the 2010 general election with a strong housing market to get that
"feelgood" factor.

The credit crunch in the United Kingdom - how long?

I don't want to be negative but previous credit crunches in the United Kingdom have coincided with recessions. They seem to go together like ham and eggs and I can't
see British Prime Minister Gordon Brown and UK Chancellor Alistair Darling managing to persuade the banks to resume lending. I would assume the credit crunch to last
for the whole of 2008 while the housing market is already suffering from a lack of buyers. Some areas such as London are going up but others such as the West Midlands
are going down.
I think Brown and Darling should cut stamp duty rates to help pep up the housing market, a market, which is being dampened by the slimming down of Northern Rock.
www.searchifa.co.uk. In some respects the
housing market could just freeze up if vendors do not decide to lower prices. There would be just a Mexican stand-off.