Experts fear 'property market slump' in 2008

24 2008
Homeowners have been advised to pull out of the property market before a slump next year wipes hundreds of millions of pounds of the value of the UK's homes.

Concerned by slowing house prices and continued strife from the sub-prime mortgage lending sector, industry bosses believe that residential property owners could be left worse for wear if the market crashes this year.

With private rents currently much cheaper than mortgage payments, it could be in many people's interests to rent until the market stabilises, while first time buyers would be advised to stay away from the property market for the time being.

Julian King, a representative of National Homebuyers, the UK's largest home purchase company, explained: "There has been a sea change in the property market in the last six months. Many homeowners are not able to meet their mortgage payments and are desperate for a solution.

"Banks have been lending too much to those who cannot afford it and subsequently ended up struggling to meet extortionate mortgage repayments. There is talk of interest rate cuts on the horizon. But for many families it will be too little too late."

It is estimated that some 45,000 homes will be repossessed in 2008 because owners cannot meet their mortgage repayments.
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