
– The Housing Market Has Restarted But The Economy Is Stalled
– The Recession And A Credit Crunch Will Limit The Recovery
The housing market reopening for business last week was welcome news but caught many unaware, including the government. Restarting the housing market was always going to be a priority given its importance to the economy, so it is not surprising that restrictions have been eased as early as possible. Initial data suggests that interest from consumers has rebounded, though perhaps not as much as estate agents’ excitement. The market will almost certainly recover from the low levels of transactions reported in yesterday’s HMRC release but it will take time for delayed and new purchases to reach completion. Meanwhile, the economic data continues to worsen and the largest economic shock in recent history will limit potential buyers’ ability and enthusiasm for making the biggest financial decision of their life. The housing market may have restarted but the economy is stalled and there is a credit crunch limiting lending at higher loan-to-value ratios.
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