The UK government’s demand for the banks & other financial institutions to re-commence lending at pre-recession levels were given a severe shock when one of the UK’s leading bankers Barclays Chief Executive John Varley suggested that Bank lending will take 1-2 years to return to normal, and more worryingly asset prices need as much as 18 months to stabilise.
Mr. Varley had previously been quoted that he expected British house prices to fall a total of 30 percent from the peak values set in summer 2007.
Whilst Mr. Varley’s views confirm previous articles, there are still those who feel the lack of credit/loans is the fundamental problem in the property market.
This is not the case, basically the property sector has to find a way of instilling confidence in the buyer & with the market still in freefall no one in their right mind is either a lender or a borrower. If we add to this the general uncertainty in the economy & the massive rise in unemployment in the private sector, those who talk about the problem of credit being the panacea to the recovery should think again.
The fact is the longer we dither with repossessions the longer we postpone the stabilisation of house/property prices, once this occurs the sooner we can look for a recovery in the market with a slow & steady rise in prices as confidence in the housing sector is allied to a growth in borrowing.
Regrettably the repossessions are going to happen at some time, what should be planned is a controlled repossession plan with alternative housing/accommodation for (particularly) those purchasers unfortunate to have been caught in the 30 month previous to the start of house value depreciation.
The quicker we find the floor in house prices the quicker will be the recovery, even the millions of casualties from the disastrous Brown Chancellorship will benefit from this stark reality.
A number of economic experts have finally raised their heads above the parapet & suggested the recapitalisation of the banks has failed, with some suggesting even more of the taxpayers money will have to be used.
Whilst neither of the two main political parties has found the full formula to either stabilisation or recovery, the Prime Minister should listen to the Tories & their loan guarantee scheme, it will return confidence to industry/business, lenders, soothe the worries of unemployment as businesses invest & indirectly may even assist the housing sector whilst ensuring the UK need not borrow to the levels indicated in Chancellor Darling’s Pre-Budget Statement.
But as Brown struts the Globe with delusions of grandeur the real truth of his competence is the UK economy on which a certain Mr. Branson said the UK economy is F*@k^d & whilst it is true the technical jargon may put it differently Sir Richard’s version is far more succinct. |
