Property Rescue Blog

According to the Centre for Economics and Business Research (CEBR), interest rates in the UK will remain low for years to come. The current level of 0.5% will hold through 2011, and a rate of 2% won't occur until approximately 2014.

News that the British Chambers of Commerce (BCC) has expressed skepticism about whether the economy in the UK got out of the recession during the third quarter of 2009 has reignited worries that end is not near yet in terms of financial troubles.

Through most of the year, the Bank of England shows that mortgage approvals have increased. However, that positive news is largely offset by the fact that mortgage approvals went down slightly in August and were down on last year.

In discouraging news for struggling homeowners, The Nationwide have warned that price increases that have happened lately probably will not continue at their current rate. This is particularly true if additional properties enter the market.

Although consumer debt - including debt from credit cards and personal loans - fell by £300m last month, mortgage loan debt increased by £1bn in August. Lending is expected to remain slow due to the weak economy and the lowered ability to lend in general.

Even though personal debt in the UK fell during the month of July, it rose once more during the month of June according to the Bank. Indeed, personal debt went up by £700m in August, bringing the total owed in the UK to an astonishing £1,457bn.

Although certain market conditions have improved a bit in recent months, it is important for people in the UK to realise that activity won't return to normal until building societies and other kinds of lenders have mortgage funds available to them.

A chain reaction of sorts is happening right now in the UK, as building societies who are only able to offer their savers low rates of interest are then inhibited in their ability to lend cash to prospective home buyers.

Although banks remain very cautious about lending in the midst of a major recession, a deposit of 10% to 20% will help you find deals. Credit history is more critical than ever, as are employment and earnings.

The economic forecasting group Ernst & Young Item Club has recently reported that the rise in house prices in the UK is a "false dawn." In fact, the group says that house prices will not bounce back to their 2007 highs for at least five years.