The UK housing market is in a recession, the global economy is declining, and the financial world is full of struggles. With so much bad press, it would be nice to have some sort of silver lining to look forward to. Unfortunately, in order for the UK housing market to turn around, several big events will have to happen, and it may take some time for those actions to become evident.
Some may say that the housing crisis was caused by greed. It is hard to dispute this fact. There was a period of several years when people were allowed to borrow far much more money than they could afford on houses that were selling at leaps and bounds above their actual value. At some point, it all had to come crashing down. That point was the summer of 2008.
The UK housing market will bounce back, that is for certain. The question that everyone wants the answer to is: when will it bounce back? Some financial analysts believe the turn around will occur when the banks will start lending money again. While this may appear to be true, the banks need to do more than lend money. They need to offer products that suit the needs of the people at terms that are fair and affordable. There are banks lending money in the credit crunch, but the loan to values are very low and the restrictions are very high. There is a consensus though, that when average people are able to find an adequate mortgage at their local bank, then property will begin to move again.
In addition to banks lending money regularly, unemployment will need to stabilize. As the credit crisis continues, more and more companies have to lay people off or make them redundant. There are currently not enough jobs available for those out of work individuals. While most sectors are taking a look at their profits and make redundancies, the financial industry has been the most severely affected. The government does realize the impact of unemployment and are working to correct the problem. They have recently enacted a program where people in the financial services industry can take a fast track course series to become a teacher. Teaching is one of the few areas in the UK that is still in need of workers. By giving the out of work bankers an opportunity for a career change in a short amount of time, the government has set a good example of how they are willing to help the credit crisis come to an end.
Finally, in order to turn the UK housing market around, consumer confidence needs to be raised. People need to feel like the economy has hit the bottom, that if they were to purchase a house, it would not severely decrease in value shortly thereafter. People need to feel secure in their jobs, without an overwhelming fear that they may be the next one made redundant.
If the UK can get banks to lend money, unemployment to stabilize, and consumer confidence to rise, then the UK housing market will be well on its way back to a better day.
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