UK house prices have fallen for three months in a row while in August UK mortgage lending dropped to a 10-year low of $15 billion. It looks as though the UK housing bubble is finally bursting after a massive double top in the market, the classic technical indicator of a coming big drop back to previous lows.
The UK banking crisis of late 2007 first brought a correction in UK house prices that had risen more of less continuously from 1993. But that 20 per cent dip in prices was followed by a rebound on the back of super low interest rates introduced to combat the global financial crisis in late 2008.
That pushed UK house prices back up. The problem is that this only made prices even more vulnerable, adding an obvious future rise in interest rates to a long list of potential hazards.
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