Northern Rock and the Impact on Housing Prices

Many feel that the experience of Northern Rock means that the once booming UK Housing market is likely to falter.

The main effect of Northern Rock's demise is the impact on consumer confidence. Although, the Bank is very unlikely to go bankrupt, the damage to its reputation has been done. The most likely scenario for the bank, now, is a takeover - possibly by Lloyds TSB or HSBC. The fact consumer confidence in mortgage lending has been weakened means that people are less likely to take out risky mortgage loans.

There were previously signs that the UK Housing market was cooling on the back of rising interest rates and increased affordability. The impact of the northern rock crisis is likely to hasten the fall in house price growth and could possibly cause house prices to start falling in 2008.

See also


Post a Comment

Subscribe to Post Comments [Atom]

<< Home