Property Rescue Blog

In a speech given on Tuesday 21 October in Leeds, the governor of the Bank of England, Mervyn King, admitted that the likelihood of recession in the UK was real and that the downturn could be ‘prolonged’.  Hot on his heels came the Prime Minister admitting in Parliament that recession was around the corner.

This could hardly have come as a surprise to anyone who has read the papers, watched the news or observed the downward spiralling of global economies over the past few weeks, yet the markets reacted the morning after Mr King’s speech with a tumble.  One does not doubt the validity of his warning but wonders whether spelling out the impending doom was justified.  After all, anyone unaware of impending recession must have been visiting from a far away planet!  It all begs the question of whether those in the know are talking a bad situation into a worse one.

There is just a glimmer of light, however, peeping through the darkness of the very long tunnel of home ownership.  The Bank of England reduced interest rates by half of one per cent earlier this month and some pundits think that that another cut will be necessary if Mr King’s warnings about controlling inflation are to be heeded.  Lenders have already responded to the initial cut and are likely to feel pressure to cut mortgage interest rates further should there be another cut in Bank rates.

Meanwhile, back in the long dark tunnel, the numbers of people entering negative equity are rising fast.  There is no end in sight to the fall in house prices, leaving some of those who have purchased recently in the worrying situation of knowing that their loan is more than the worth of their home.; all a grim reminder of the last property crash in the early 1990s.  Currently it is estimated that around 60,000 home owners are entering negative equity every month. 

If you are in that situation, you may be content to wait for stabilisation of the property market.  If cyclical trends are to be believed, property is likely to recover some, if not all, of its value over time.  For many, sitting tight could be the best option. 

But not everyone has the luxury of choice.  If you need to sell up because of rising debts or inability to meet your mortgage repayments, give Property Rescue a call and ask about their guaranteed valuation service.  Initial consultation with one of their experts is free and entirely without obligation.  They will not pressure you into proceeding and will not pester you with phone calls should you decide not to go ahead.  In a market where almost nothing is moving, it is still possible to sell your home.  Call Property Rescue for an informal chat and more details.