Prices were allowed to spiral upwards at too faster rate on the back of nothing, but a ‘feel good factor’ under the Labour government. People were spending credit as opposed to their earnings. Each year increasing their mortgages to accommodate their new upgrades on cars, multiple annual family holidays and plasma televisions in every room. These kind of people added to the national debt and now find themselves in negative equity (rightly so?) and are now starting to loose their treasured possessions (which they never really owned or worked for?) and the worst case scenario is many situations, repossession of their property.

Yes, many people will feel sorry for the ones losing their homes, but just how many of these people are actually in this situation for genuine reasons? How many of them simply spent, spent, spent with absolutely no regard for future finacial situations?

People tag them as vultures, but these people that are now buying up cheap property from auctions and taking advantage of giveaway prices of cars etc because other people are trying to stay afloat should be looked up to and thanked for having been safer with their spending. Families that studied their monthly bills, never were tempted to take advantage of their limitless credit spending, that may even have rented foreseeing this property price crash, are the ones that will profit.

I think that over the next 2-3 years house prices will adjust to or maybe even below the inflation band. At present it will be those with cash that are king and those that borrowed too much that will be poor. This unfortunately is a cycle that has occured many times before and it’s a cycle that will continue in years to come.

As the global markets all show big signs of lack of confidence and many being suspended due to their immense falls are we to be falling into a recession, a prolonged recession that will see everything come back down to normal once again, house prices to be affordable, lending to be sensible, fat cat bosses thrown out the window, a normal class system as we had it before?

The FTSE has lost nearly half it’s value in little over a year, so really we are looking at a major re-adjustion with regards to the amount of money that is floating about out there, clearly things were over valued and for those that still own these stocks now find themselves owning 50% less than they thought. Many people are hoping that this will filter through to the housing market, indeed we are already seeing signs that this is the case. I even checked Rightmove for the first time in ages yesterday, yes prices are still far to over priced, a normal family 3 bedroom semi detached local to me in Essex being valued 485k is just too silly for words.

Soon there will be a big fall in property prices and thank goodness for that for it is this massive increase in prices over the last 12 years or so, ever since the Labour government got in and messed up all the groundwork that the Conservative government had done, that has caused this massive credit spending spree. Now that house prices are falling, all the greedy ones out there will have to start selling off their sports cars, their LCD television in every room, forget the three trips to Florida every year….. just get back to earning a wage that pays for your mortgage and bills.

FOr those that got out at the height of the boom, they are lucky, they can sit back and wait for all this economic turbulance to settle and pick their way back into the property market for there will soon be many lowered price property than there are today.

FTSE index is a sure way to see the confidence amongst the big investers and if they start pulling out the finacial scene then we can be certain that we are in for a cold spell. Start reducing your property prices now if you want out, otherwise in a couple of years time you will be selling them for only what they are worth…. and that isn’t a bad thought at all.