Situation with insolvencies and house prices looks bleak

A number of industry professionals have recently expressed concern over the bleak outlook when it comes to insolvency levels and house prices in the UK, stating that whilst insolvency levels continue to rise due to the global credit crunch house prices are continuing to fall, leaving some consumers facing a double whammy.

One official stated: “This is a dark cloud that is getting ever darker for the economy.” Another said: “What is most concerning is that these house price falls have come with the economy only having registered a modest slowdown. With the economy and labour market set to weaken further, our forecast for a 20 percent fall in house prices by end-2009 is firmly on track.”

One also went on to state: “The effects of the credit crunch are only just showing up in some of the hard data so it is premature to expect the data to show a tidal wave of insolvencies. However, this will come and become an increasingly prominent issue along with repossessions.”

The global credit crunch and falling house prices have impacted greatly on the economy, as well as the mortgage and housing markets, both of which have experienced slumping figures.

In addition, tight credit conditions and rising costs have resulted in more people finding themselves unable to cope financially and turning to insolvency.