What are the policymakers and experts saying about the UK housing market?

Posted under General by Michael

Mervyn King, the governor of the BoE, recently told MPs that it would be a big mistake to go back to a stage where the mortgage market was – when loans were easier to come by and were cheaper a year ago.

Prime Minister Gordon Brown recently told the BBC’s Today programme that the housing market was one of a several economic issues to be dealt with along with help for pensioners and low-income families on fuel bills and petrol prices. He added: “Now, I think that we can come through this as a country.” 

The Liberal Democrat’s deputy leader and Treasury spokesman, Vince Cable, felt substantial house price falls should be expected. “It does unfortunately mean that a huge number of people who often had no choice but to get very large mortgages at the peak of the market, they now find themselves trapped in the problem of negative equity,” he added.

UK economist at Global Insight, Howard Archer remarked: “A significant number of individuals have had to stretch themselves (to the absolute limit) for getting into the housing market in recent times as prices soared. This means that they are particularly vulnerable to any kind of adverse shock to their finances.”