For the UK property market, the short-term effects of the Global Financial Crisis (GFC) were dramatic and swift. The average UK house price fell by 20% in 16 months. Transaction levels, which had averaged 1.65 million a year in the previous 10 years, fell to 730,000 in the 12 months to the end of June 2009.
Ten years on, the crisis and its consequences have dramatically changed the property landscape. It was not until May 2014, for example, that the average UK house price recovered to its pre-credit crunch level, while transactions have only once risen above 1.3 million. And, as we explore here, those events continue to have four significant impacts on the market and will shape it for many years to come.
There’s been a dramatic slump in spending and transactions
In the year to the end of March 2017, the total spend on house purchases was £312 billion. Given persistently reduced transaction levels and changes in how they are made up, this is £30 billion less than was seen 10 years ago.
The amount funded by debt has fallen by even more, some £47 billion. Now, debt accounts for just 43% of house purchase funding, with cash and accumulated equity the dominant source of funding.
For more information click 28072017 – Four ways the GFC continues to impact the housing market – EN and 28072017- 4 phương diện cuộc khủng hoảng tài chính thế giới tiếp tục tác động lên thị trường nhà ở – VN
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