Tuesday, 20 February 2007

House Price Drop

Currently house prices in the Uk have started to drop, many people will argue this pointing out various facts and figures, however many facts provided are spurious, and leave out a huge array of variables, such as furnishings etc. The fact of the matter is that while the government is doing its usual job of throwing around random figures (nice round figure of 10% growth in December) many of the companies as a whole are reporting between-2.7% and .3% growth. Worse than that, some regional areas are reporting hose price drops of 7% in the last few months.

This is definately not a good sign for the economy, especially with rising inflation and interest rates. Of course the raise in interest rates, good news for savers bad news for borrowers, a rise in interest rates is a treasurers first defence against spiraling inflation, like at teh moment where most people are living beyond their means.

The inflation is, rather cruelly, designed to make a large number or people to default on their mortgages, spend less, save more, make houses and goods cheaper etc. Of course this will weaken the pound, but so would a full on depression that our government has to avoid, and at least this way we get to keep our jobs for a while.

The coming years will be bad news for anyone with a mortgage, especially a variable one, along with any investors in the pound in the currency exchange, for local savers though teh interest rates will keep your savings growing nicely! Gold will be a safe bet, foreign currencies if you fancy taking a quick risk.

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