Increase in middle-class housing problems
It has been revealed that there has been a significant increase in middle-class homeowners seeking advice after falling into financial trouble. This is the latest area of the UK housing market to be affected by the ongoing recession with income becoming tighter and tighter and everyday living expenses rising month by month. The fact this is hitting the area of the market where houses cost in excess of £500,000 is worrying and could lead to a significant increase in bad debts.
While in many cases the top tier of the UK housing market remains fairly isolated from the problems being felt lower down the ladder, it seems as though problems are starting to creep up from the lower levels of the sector. Even though home repossessions were sharply higher in 2008, many experts are predicting in excess of 70,000 UK homes will be repossessed this year which could hold back the UK property market if the sales are not handled correctly.
Even though UK base rates have been held at historically low levels after this month's MPC meeting we still await clear signs that liquidity is returning to the mortgage market. Only then will we see interest return to the UK property market and "bargain hunters" start to look around for the best deals.
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