News that the UK is experiencing a double-dip recession is likely to impact mortgage lending throughout the nation.
Donna Houguez, market analyst at Quick Move Now – a home buyer based in the UK – has noted the announcement will add further stress to the housing market.
Ms Houguez explained positive growth reports would have triggered a build-up of confidence in the sector, resulting in lending criteria becoming more relaxed.
However, this movement has not taken place and may mean property analysts have to re-evaluate their predictions for the year ahead.
Ms Houguez observed: “We expect the surprise -0.2 per cent shrinkage of the economy to further restrict the number of buyers who will be able to secure a mortgage.”
In addition, the industry figure pointed out chancellor of the exchequer George Osborne’s ruling out of additional growth policies will result in continued pessimism regarding unemployment and general finances .
This might therefore lead to property values falling further and an escalation in repossessions – but more positive movement may be seen in the rental sector, with the lack of mortgage availability driving greater numbers towards this market.
