Inquiring minds are looking at England and wondering if this is the fate of the US housing market. Leading financial analysts warned of misery ahead for home owners as banks continue to impose strict lending criteria on borrowers:
The latest figures from the Bank of England revealed that net lending – which strips out redemptions and repayments – dropped to just £86 million in July, a steep fall from June’s £518 million.
It is the fourth lowest level since the Bank’s records began in 1993.
The analysts are weighing in:
Andrew Goodwin, senior economic adviser to the Ernst & Young ITEM Club, said: “The housing market is heading for a double dip, with net mortgage lending pretty much flat and the number of mortgage approvals remaining very low.
“These figures tend to be well correlated with prices and they point to falling prices over the second half of this year, particularly now that the supply shortages of the early part of the year have eased.”
Howard Archer, an economist at Global Insight, said: “It is hard at this stage to be optimistic about house prices in 2011 as the fiscal squeeze will increasingly kick in, which will hit people’s pockets and lead to serious job losses in the public sector.”
Which European country will be the next domino to fall? England? Spain? Germany???
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