With most people realising that the best mortgage rates ever are out there on the market many are concerned that the property market cannot go much lower, but this may not be the truth given the fact that experts now fear that a second recession is at hand.
With house prices already down about 10% since the housing peak, the news that a double dip recession is on the way cause the entire market to collapse with home ownership becoming nothing more than a pipe dream to most.
At the same time, experts are theorising over what would happen if a second recession were to occur, given the fact that the mortgage rates simply cannot get much lower to entice buyers with credit.
Some banks are now offering mortgage rates as low as 2%, so there literally is not too much room for the housing market to adjust to the lower house prices and lower income potential. Plus, in the face of the economic instability and the problems within the EU many banks are tightening their lending criteria even more which should lead into a large problem.
The only people that are posed to benefit from the news that housing prices have fallen yet again are first time home buyers that have managed to keep their credit clean, as they can take advantage of the low mortgage rates offered by banks such as Nationwide and Leeds and possibly finally get the chance to get on the property market.
For many of these people ,the high LTV on houses has helped to keep them off the market because they could not afford such a large deposit, but with house prices falling even lower the loan to value percentage amount also gets lower as well.
The big question right now, as news of house prices falling during September makes the newspapers again, is of course how fast they will fall. If they slowly decrease over the next few months there will be time for them to stabilise and then start to rise again without too much harm to the UK economy, but if the rate of decrease starts to sharply pick up then there is a good chance that housing communities are going to drop rapidly and fall into disarray which is what has most experts concerned.