Shock Interest Rate Announcement

DervProf

Thrugelmir wrote: »

While the financial crisis wasn't created by the UK property market. The UK property market has some sizable hurdles to overcome before any degree of normality will finally return.

The UK property market would have hit the buffers at some point in time. As both the lending policy and business models of some lenders was fundamentally flawed.

Exactly.

A return to lower LTVs, while beneficial in the short term, will only lead to a requirement for even lower LTVs. Before we know it, some banks will be in the same position they were 5 years ago - on the edge of disaster.

If there's a shortage of property in the UK (causing prices to be relatively high), then lending more and more is simply going to make the problem worse - prices will rise faster and banks will have to lend more to support those prices.