Now House Building Firms Want Government Help
The United Kingdom economy continues to slow down, and House Sales UK continue to get even more difficult, and property values are continuing to fall. Even though property values are falling slower now than they were falling earlier this year, they are still causing serious concerns for property Building Firms, and indeed for Commercial Property Developers as well.
Due to this, the House Builders Association, the biggest trade body representing the UK industry, has told the government that considerable additional funds are required in order to stop a possible meltdown in big parts of the industry. They point out that such a tragedy would have potentially catastrophic and long term effects on the property Sales UK market, and this would in turn spread into and significantly damage the wider economy
The House Builders Association, known as HBA wrote to the Chancellor of the Exchequer, stating that the current crisis had come about due to a severe shortage in the availability of mortgages. The HBA, which is a division of the National Federation of Builders, went on to claim that this lack of mortgage funds was driving the entire UK economy into downturn.
The HBA also point out that the Council of Mortgage Lenders has already predicted that net lending throughout the current year will be about forty billion pounds, down from one hundred and eight billion pounds last year. That is a fall of an astounding 63%. The Council of Mortgage Lenders estimate an additional fall in net lending during 09.
The House Builders Associations welcome and approve of the government’s recent recapitalisation of the High Street Banks, with its objective of restoring lending to a level suitable for maintaining economic activity at a level which will lessen the present unavoidable downturn. However they argue that this will not do well unless the Chancellor can find a way to offer some guaranteed mortgage lending.
The HBA thinks that such a scheme could be applied|put into practice|implementedminimal risk to the treasury, because, they argue that all new lending in the foreseeable future will only be agreed if the borrower satisfies a much firmer series of requirements than has been the case recently. It’s predicted that, from now on Home Buyers will have to put down a big deposit, and this will perform 2 essential functions; first of all it will demonstrate that the Home Buyer is able to manage their money well enough to gather together a deposit, and second of all it will supply a buffer against negative equity in case property values fall further, or if the Home Buyer is unlucky enough to become unemployed, and need to roll over the interest for up to 2 years.
Posted on: Wednesday, December 31, 2008 at 6:11 am 
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