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Why the European property market is heading for danger

danger housing

European property market in danger

 

Europeans are not out of the woods and attention needs to be paid to all European economic policies ensuring that health is injected into each housing market. Lower house prices reduce the amount of borrowing that households can raise against a property. Less access to credit tends results in less spending, less home moving and less economic stimulants.

european-propertyHousing market falls increases the loan-to-value ratio of mortgage debt (the value of the debt will rise as a percentage of the value of the property as prices fall). In some cases, this leads to negative equity, whereby even selling the house will not be sufficient to repay the debt. This traps people in their properties, prevents them from borrowing further against the property, or forces them into bankruptcy.

In all scenarios, owners can’t clear their debts or take a profit on a sale — and that depresses spending too. This nightmare situation is developing now and its time to wake up before we hit another Global Financial Crisis.

read more at LinkedIn – Why Suicidal Housing Markets Can Kill!

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Nick Marr
 

Nick Marr is an author, speaker, digital marketing executive and coach with a passion for inspirational leadership. He started his coaching career as a police officer helping to deliver a change to senior officer leadership styles. He also represented minority police officers in various roles throughout his 20 year career. His move into business saw him as founder of one of the first online estate agencies in the UK. He has worked as Chief Marketing Officer and Vice President of Sales for Digital Marketing organisations. He once created a social media viral that went global just by using his head... His innovation in business led to him being featured in the Financial Times and appearances on BBC TV.