Survey Reveals Housing ‘Crash’ Fears

New research reveals wavering public confidence in the housing market with fears of a crash coming within the next five years – if not sooner. An online survey of over 2,000 British adults found that while just over one in four respondents  had faith in the stability of the market, with a substantial proportion less convinced on the ability of the market to avoid another boom and bust cycle. Two thirds of respondents predicted a crash within the next decade, but many feared a  crash was even more imminent, with one in four saying there will be a crash within just two years – and 6% saying it could happen in the next 12 months. Read more on 24housing.

Bank Of England Concerns Over Buy-To-Let Boom

The growing buy-to-let property market in the UK could post a threat to wider financial stability, a Bank of England committee has said. Buy-to-let mortgage lending had the potential to "amplify" a housing boom and bust, the Bank's Financial Stability Committee (FPC) concluded. Lending in this sector has risen by 40% since 2008, the FPC said. It stopped short of suggesting any intervention by government or regulators at this stage. "As the market continues to grow, particularly if driven by loosening of underwriting standards, the sector could pose risks to broader financial stability, both through credit risk to banks and the amplification of movements in the housing market," the committee said. Read more on the BBC website.

B Of E Warns Housing Market Boom May Turn To Crash

Britain's booming housing market could be heading for a fresh crash, the Bank of England said in its toughest warning yet about the dangers of the return of rapidly rising property prices.  As it emerged that one in 15 London homes are now selling for £1m or more, Sir Jon Cunliffe, Threadneedle Street's deputy governor for financial stability, said Britain had a history of booms turning to bust. "This is a movie that has been seen more than once in the UK." The Bank's deputy governor said that there were always risks to financial stability "blinking on the dashboard" but made clear his concern about the possibility that borrowers taking on large mortgages could find themselves in trouble when interest rates inevitably rose.  Read more on the Guardian website.

UK Budget Must Deliver Homes Not Bubbles

George Osborne has something to boast about during his budget update on Dec. 5. UK growth is up and the deficit is down. But the Chancellor of the Exchequer has engineered an all-too-British recovery, in which house-price inflation will soon be too prominent. A radical policy shift is needed to build a genuinely sustainable revival. The government’s Help to Buy mortgage indemnity scheme makes a re-run of housing boom and bust all the more likely. House building is disgracefully low – a social problem and a constraint on growth. For three decades from 1960 the UK built 298,000 homes a year. Since 2000, the figure is 180,000 and falling. It was 141,000 in 2010-12. It’s vital that Osborne acts to spur residential construction. Read more on the Reuters website.

Osborne Warns Of New Curbs on Housing Market to Avoid Boom and Bust

More curbs on the housing market and the City may be needed to ensure a “responsible recovery” for the economy, George Osborne has said. He also hinted at more curbs on the housing market and the City to avoid a return to the “boom and bust” cycle that led up to the last financial crisis and recession. "In the Autumn Statement I will say the job is not yet done because we have got to make sure we go on taking the difficult decisions to secure the recovery,” he told the BBC. "We want a responsible recovery.” Read more on the Daily Telegraph website.