Tuesday, 12 August 2008

Record Low on House Buying

It has been stated that although house prices are falling, not many people are buying houses. Well, looking into deeper, we can see that there are people who wants to buy houses but due to the reality of credit crunch, they could not secure a loan to purchase a house. That is one of those factors. I think what is happening is that banks are not willing to lend money to each other and it is getting worst by the day.

As we have noticed, Royal Bank of Scotland have posted a loss of £600+ million as a result of write downs. This is one of the risks that banks have to take. On the brighter note, it is good that house prices are falling. This is because house prices have been inflated beyond purchasing power by many people. It will be good if house prices will continue to fall to a more reasonable level so that many people can afford to buy one for themselves.

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