Top UK Analyst: Britain Could be Heading for a Another Housing Market Crash
December 7th, 2007Hint: Feel free to substitute “Britain” with any other English-speaking country. Saves time when reading through all the housing doom news from around the world.
Via: Reuters:
Britain could be heading for a another housing market crash if thousands of buy-to-let investors ditch their properties as prices tumble, according to top fund manager Nicola Horlick.
The City “Superwoman” reckons defaults on buy-to-let mortgages, which make up around a tenth of the market, could be the trigger for a slump as investors cut their losses and let banks repossess their properties if house prices fall.
“If you’ve borrowed 90 percent of the money and you’ve only put in 10 percent yourself but prices fall 12 percent, it’s in your interest just to leave it in the hands of the bank isn’t it?” Horlick told Reuters in an interview.
A raft of surveys have already shown house price inflation easing as homebuyers find it more costly to take out loans, and data from mortgage lender Nationwide showed prices last month fell at their sharpest rate in 12 years.
