The global credit crunch has meant that home owners have lost a lot of the equity that was in their homes. The first few years of the twenty first century saw house prices rise to unprecedented levels, and people were getting mortgages based on five times their combined annual income, when it used to be three. The trend towards bigger and better homes, whether you could realistically afford them or not, has meant that when the crunch came in 2008, repossessions went up and house prices started to drop.

Over the last nine months home owners have seen the value of their property sink lower than they would have thought possible. In spite of this, experts report that in the last quarter house prices have stopped falling and are now on the up. While this is good news for home owners, it is unclear whether this trend will continue with the Government in crisis and businesses still closing because the banks have not yet lifted their lending restrictions.

The dip in the property market meant that things looked rosier for first time buyers who now stood a chance a of getting on the property ladder, but the restrictions on lending have meant that fewer first time buyers than expected are getting their foot on the property ladder. Now experts tell us that house prices are rising again, although they have not yet reached their previous value. Many provincial cities that have built blocks of apartments aimed at young professionals, are finding that half of the apartments remain empty because people have a harder time getting a mortgage.
 

Although house prices may be on the up, it is difficult to say whether this is yet of any benefit to home owners. In the past when property prices have risen it has been fairly easy for people to get second mortgages to make improvements to their home, but this is not necessarily the case at present. The big banks are still hesitant when it comes to lending and some have refused to extend the credit of small businesses, forcing that company into liquidation. Even though the Government has offered a number of incentives to the banks to start lending again, this doesn’t seem to have had much effect. Rising house prices is good news for home owners but perhaps not so good for the first time buyers who have yet to get started on the property ladder.

It is great news that property prices are on the up, although this is not the case in all parts of the country, but unless the banks loosen their purse strings the housing market could remain static. Rising house prices depend, to some extent, on people with the money to buy property, unless people can get mortgages it does raise the question of how long this recovery in the property market will last.