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2008 – The Year UK Property Prices Plunged

At the start of 2008 UK prices started to fall, partly due to long term price increases that had become unsustainable, and partly due to the credit crunch. For many home owners this is the worst possible scenario, their mortgage costs are increasing (due to credit shortages) and house prices are falling. In short they are trapped, unable to ride a market downturn due to high mortgage costs, their only option is to sell.

But, selling in a falling market with shortage of mortgage funds for buyers is not easy. For some home owners this means they will end up defaulting on their mortgages and then get repossessed. And of course the repossessed properties will go on the market at a discount price, having the effect of pulling prices down further. For some people there is a way out of this dilemma, they can find a company that will get them a private investor who can achieve a quick house sale, often within a few weeks. In some cases these private investors will even allow the homeowner to sell then rent back their house.

So, what needs to happen to stop house prices plunging? In short it is market confidence, and a key factor to that will be the cost and availability of mortgages for both home owners and prospective buyers. As 2008 rolls out that facts will become clear, but hold tight for a very bumpy ride.

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