Is there demand for UK property?
Even though we have seen signs that UK property prices are starting to firm up, although some reports suggest there are and some reports suggest they are not, there is no doubt there is interest from UK consumers and UK investors. However, whether this interest is purely "bottom fishing", or a return to former genuine interest levels remains to be seen.
While there is no doubt that some of the more positive economic reports have increased the optimism shown by some investors, there is still great concern about the UK employment market. It is now taken for granted that unemployment will crash through 3 million over the next 12 months and take some time to recover, in line with the expected slow recovery in the UK economy. The ever increasing squeeze on the employment market will put more and more investors and consumers under financial pressure which is something the UK banking community is only too aware.
Do the banks increase cheap lending to refloat the economy and take a chance this will stick or do they wait until they see a genuine recovery in the UK economy and a recovery in demand for finance before increasing their lending levels?
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