The government have, with others, attempted to bring an end to the current crisis by investing millions into the banks hoping that this will, in turn, revive the property market. This has been beset with uncertainty since 2006, when it was proposed changes needed to take place in the way that property was transacted.
In order to answer the question, we need to look at various facts.
According to records, the global credit crunch began on 9 August 2007 and, amongst others, Northern Rock reached crisis point in September 2007.
So far as the property market is concerned, the Home Information Pack was being considered by the government in 2006 as an attempt, initially, to deal with gazumping. When statistics eventually proved that this only affected 2% of the market, the reason then given was in order to speed up the conveyancing process. However, the Land Registry was already proposing e-conveyancing. Many law firms had also, by that time, adopted systems that enabled them to process automatically many of the forms required for the transactions.
From 2006 onwards, there were many challenges put as to how the proposal was expected to speed the process and, indeed, several changes were made, which led the consumer to be extremely uncertain in regard to the property market and the changes expected.
Early in 2007, the general public were extremely concerned as to whether their property would be affected by the changes and this led to many deciding not to venture into the market until this uncertainty had been brought to an end.
Those consumers who owned 4-bedroom properties discovered that they were to be affected by the new regulations on 10 August 2007 and, therefore, those who were thinking of moving, put their properties on the market in July 2007 and, of course, 3-bedroom properties went on in August 2007 in the light of the fact that they were to be affected by September 2007 and all other properties went on between September and 14 December 2007, when they also became affected by the new regulations.
The result of this was that, in January 2008, the market was at least 50% down on previous years and prices were reducing, mainly due to the fact that there were more properties on the market than there were buyers.
So, to answer the question, the downturn in the property market came well before the global credit crunch and, unfortunately, the proposed changes as regards the banking industry have done nothing to improve the situation.
In my view, the only way to breathe life back into the property market is to review the Home Information Pack, the various taxes on property (including stamp duty land tax) and, perhaps, also add some mortgage interest relief for a year.
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