London Real Estate

Table of Contents

➢ Executive Summary ……………………………………………………………2

➢ London’s Housing Market Before the Credit Crunch.……………………….3

➢ The Credit Crunch………………………………………………………………6

➢ The Effects of the Credit Crunch on the Housing Market…………………14

➢ Personal Impressions and Opinions………………………………………...20

➢ Summary and Conclusions…………………………………………………...22

➢ Appendix: Interview Information……………………………………………...25

➢ Reference Section……………………………………………………………..31

Executive Summary:

This report will provide an in-depth perspective to the United Kingdom’s, particularly London’s, housing market. This past August marked the unpleasant anniversary of the start of the credit crunch that has had a strong and negative impact worldwide. This credit crunch has been a catalyst for the continuing decreasing value of properties throughout the UK, especially London. An adjustment in the value of properties in London was inevitable since the housing market was experiencing phenomenal growth for 10 years consecutively. However, the lack of liquidity is making a readjustment in housing prices more painful and prolonged compared to normal situations. This topic will be approached through a thorough analysis of the residential market before the credit crunch, during the credit crunch, and the effects of the credit crunch on the housing market.

During the seminar, everyone on the program was feeling the pain of the pound vs. dollar exchange rate. Recently the pound has been depreciating against the dollar and the euro as the UK nears an economic recession. The pound has fell to 82.15 pence per euro, which is the lowest the pound has been since the euro entered the market, and the pound has dropped to $1.5373, which is 22% decrease.14 The main factor that is leading the UK into a recession is that UK home sales continue to decrease. Currently the Bank of England interest rates are at 3.0%, but it is predicted that they will...