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According to a recent report fears over a slump in house prices are set to get worse, with some industry officials expecting house prices to crash if something is not done to ease the ongoing mortgage crisis. Whilst the government has put plans into place to try and ease the situation, and has also ploughed billions into the money markets to increase liquidity, the crisis in the mortgage sector continues, and a recent report has suggested that this situation could cause ongoing gloom for the housing market.

The report shows that at this time of the year there is usually a rise in house prices, and this is one of the most popular times of the year to sell your home. However, officials from the property website Right Move have said that for the first time since it started taking records in 2002 house prices have been falling this April on an annual basis. The report goes on to state that whilst many homes are being put on the market many are failing to find a buyer.

Officials say that if the government’s plan fails to work then there could be a mortgage meltdown that brings the property market to its knees. One official said: ‘An ongoing lack of mortgages funds could trigger a price crash if an increasing number of sellers are forced to seek rarer mortgage-free cash buyers or those with large deposits. As well as being thinner on the ground, these buyers will be able to demand larger discounts.’

Lenders are continuing to suffer problems in securing finance to fund their mortgage lending since the onset of the credit card crunch, and many consumers are finding it difficult or even impossible to get an affordable mortgage due to increased stringency and reduced choice.

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