The housing market also suffered. House prices decreased steadily, as did the abundance of available buyers, which meant sellers were not only having to reduce the price of their home, but were also finding it far more difficult to sell it. Mortgages also became harder to come by, as lenders withdrew the famous 95% mortgage almost overnight, and hiked rates to make up for lost business.
2012 however saw some recovery for the housing market. House prices started to rise again, and this month a survey from RightMove revealed that prices are now on average just £2115 lower than their peak before the recession in 2008.
It now seems too that people are finally deciding it is the right time to purchase new property. In a recent poll on our site we asked people about their ambitions for the next 12 months in terms of their ownership of a home. We were expecting there to be a level of pessimism surrounding the results, but it was quite the contrary. In fact 66.7pc of respondents indicated they would like to buy a home within the next 12 months, with 41.7pc indicating they would have to take out a mortgage to do so.
25pc of those who said they would like to buy a home were also potential first time buyers. This is consistent with statistics from 2012, which saw the number of first time buyers entering the housing market soar to 216,000, the highest level recorded in five years.
An exit from the economic recession at the backend of 2012 has done a lot for optimism if little else, but it is certainly encouraging to see the UK property market heading in the right direction, and 2013 should be a platform for yet more growth.
If you have any financial questions related to this story or otherwise, please do not hesitate to contact our advisors who will be happy to help.