/24-7PressRelease/ - LONDON, UK, April 19, 2008 - Unavailability of home loans has caused the most widespread fall in house prices last month in the 30-year history. The recent survey of RICS has found that the property downturn is gathering pace. Pound fell to a fresh record low against the Euro after the investors fretted the weak housing market. This move has an adverse impact on the broader UK economy. "The risks of a housing-led slowdown in the UK are rising by the day," warned George Buckley, the chief economist at Deutsche Bank.
Government is worried about the crash in the realty market. Prime Minister Gordon Brown is about to meet top retail and investment bank executives in London to discuss the impact of the global credit crunch ahead of a trip to the U.S.A.
A gloomy retail sales survey from the British Retail Consortium, are likely to reinforce expectations that the Bank of England will need to continue cutting interest rates in 2008. The BoE has trimmed rates by 25 basis points to 5 percent last week.
The BRC survey has also shown like-for-like retail sales fell in March for the first time in two years. House prices fell in March at their sharpest pace since the recession of the early 1990s as the credit crunch forces banks to toughen up home loan terms and squeezed the credit availability.
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