Housing Slump in UK Continues

The UK housing slump continues, with Halifax reporting a drop of £20,000 in house prices since the start of the year.

Mortgage approvals have fallen by 71% since last year. The credit crunch has forced banks to ration credit and try to encourage savings rather than borrowing.

With house prices falling, many potential buyers have been deterred from buying. Instead they have moved into the renting sector, which has seen healthy rentable income for landlords.

It is not clear when the slump in prices will end. Mortgage markets are still not operating normally. Furthermore the impending recession means that the risk of unemployment is putting more people off buying.

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