House Prices Still Falling

In the USA house prices fell around 6% this year, while the UK saw a much steeper decline of 16%.

House prices are expected to fall further as the recession deepens with higher unemployment and even tighter credit. Banks are building their capital reserves and hence levels of lending remain low.

We can expect the Bank of England to cut interest rates by 0.5% to 0.75% next Thursday. You will reap the benefits of this if you have a variable rate mortgage without an interest rate floor.