Housing markets in certain developed economies are beginning to lose steam, prompting worries that house prices might see corrections, especially in countries where they had been overheating.
This year, the UK government must come up with solutions to the main crises that eat away at some ordinary Britons’ well-being. One of these is the housing crisis, which continues unabated despite the billions of pounds thrown at the problem.
The Bank of England has reason to pat itself on the back. During the financial crisis of 2007-2009, things could have taken a very ugly turn if it hadn’t cut interest rates to record lows and hadn’t started printing money.
Perhaps in no other European country is the obsession with homeownership so entrenched as in Britain. The ambition to “get on the property ladder” underpins almost every young person’s dreams, pushing young people to make sacrifices to save for a deposit and then take on a big mortgage just to be able to say they own, rather than rent, their home.
But do they, in fact, own it? Increasingly, property ownership is becoming an illusion that makes people part with cash they can ill afford to spend.
With the recent stock market collapse and bear market, the critics of capitalism are out in force again; shouts that capitalism is dead or that capitalism is what caused this mess are growing louder.
There are few things that are less certain right now than the path of interest rates in the UK. That’s despite the Bank of England’s attempts to reassure investors that it will not raise its key interest rate anytime soon from the record low level of 0.5%. Even when it does, it will do so in a gradual manner, the central bank says.
By Antonia Oprita
House prices in the UK are getting another boost from the government, just in time for the May 7 general election.
The residential property bubble continues in countries like the UK and Sweden, but it seems to have spread to some other countries as well, according to data from the Bank for International Settlements.