Property Bubble: Let’s learn from our mistakes
We put up a link to a story earlier on in the week regarding the inflation of housing prices and mis-selling of mortgages and it got our Property and Real Estate solicitors thinking. Has anything been learnt from the big bust? Property prices in Northern Ireland have increased by 4.9% in recent months and we would like to think that going forward we ill not see the same mistakes made during the boom period repeated. In this blog we will look at what can be taken away from the property bubble to help avoid it bursting again!
Re-inflation of Housing Bubble
With house prices creeping up 4.9% this year in Northern Ireland we would like to think an eye is being kept on the situation. In 2007 property prices skyrocketed a staggering 55.9% in one year before falling 23% in June 2009. This years figure is dwarfed in comparison to ‘boom’ times but we should know from past experience how quickly this can snowball. If we are to see a similar acceleration in price rises we would hope that this would not be allowed to continue unchecked as it did before.
Reckless Borrowing & Lending
The real pantomime villains behind the property crash were the banks and other lending institutions. The mis-selling of mortgages, interest rate swaps, caps, collars and other loan agreements to those who could not afford them in the first place left people trapped. Again we would like to think there have been changes made to the way these agreements are sold and that this type of financial mis-selling will not occur again. After the boom the FSA stated that most lending institutions had high pressure sales environments and implemented guidance to eradicate this behavior. It remains to be seen if this ‘guidance’ is being followed and changes have actually taken place.
So, will caution be thrown to the wind once again to make way for greed or have we put enough provisions in place to protect ourselves? It seems only time will tell.
If you would like to speak to our of our Property solicitors about a mortgage or our banking a finance team, MKB Law Financial, contact us using the details below. For more updates follow our social media pages.
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