Anyone still clinging to the notion that the latest slump in house price growth was just a ‘blip’, like the 2004/05 slowdown, would have had their faith badly shaken in the past few days.
Nationwide building society reported last week that annual house price growth fell to just 1.1%. The group warned that it expects house prices to fall this year.
That was just the start of it. Recent moves by banks and building societies to pull good mortgage deals off the market as rapidly as they can, have catapulted the credit crunch into the evening news.
What was a fairly obscure financial crisis is now making itself felt in the everyday lives of the man and woman in the street. For a large chunk of the population, house prices have been a barometer to measure both their personal wealth, and the health of the economy at large.
Sadly, they’re about to find out that much of that wealth – and the apparent health of the UK – were entirely illusory…
(more…)