London Property News

STAGFLATION FEARS for housing market

Author: Callum Roberts Thursday, 19 June 2008

One again, property is back on the news!

This time it is the fear of 'Stagflation' that is causing those in the City to shiver at the prospect that we are heading for a downturn in the market.

What is 'Stagflation'?

Stagflation is where a recession combined with inflation strangles the economy. There is little doubt that we have seen an end to ever increasing house prices.

Dillon Callum added his voice to the growing chorus of top City professionals when interviewed for Channel 4 News.

The 'Credit Crunch' is not just affecting those of lower incomes.
Dillon explained that those of higher incomes are having their ability to purchase properties eroded by the fact that the banks are tightening lending criteria.

Whereas previously, if you had a good broker and you wanted to by a property, lenders were queuing to lend with little or no checks, they are now going to extremes to lend even to the most brighter than bright high earners. These are the earners that have even brighter accountants that in the past have saved thousands if not hundreds of thousands of Tax for their clients.

This situation is not helping the housing market.
We have many clients who in theory can afford to buy but can't.

How long will this go on?
Lets ask Gordon Brown!

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