The housing prices in the US are in a slump because of the aggressive lending of mortgages to the subprime market. This subprime market has been unable to return back the money as their income is constraints.
This has lead to the lending and mortgaging companies to record and report huge losses and write off the debts of the subprime market. TheUKmarket as a result is also being affected by the recession in theUSand the state of the housing market in theUnited States. Over the period of years lending to the subprime market in the UK has also increased. The buy to let options in theUKwould be the first ones to repossess the properties in the event of a slump in theUKhousing sector and the resultant negative equity.
“London and the South East led the way during the 1980’s Boom, rising much further than the rest of the country, with the rest of the country continuing to rise as London peaked. Similarly today, the South of England has risen to a much greater extent than the rest of the country, and thus is expected to fall especially hard given the credit crunch in the city ofLondon
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