New England development , originally uploaded by seadipper . Some people, including most commentators, seem to be under the impression that the present difficulties, that began with Northern Rock, will soon be resolved and things will be on the up again. I suggest not. The recession will go on for at least another two or three years and is set to get much worse before it starts to get better. House prices - in reality, land prices - have hugely overshot, due to the over-free lending policy which has allowed people to borrow far more than they can really afford, and in doing so fuel a boom which is nothing more than a bubble. The tightening of lending conditions means, firstly, that houses new and old will be more difficult to sell. Then there will be a reduction in construction activity as the housebuilders cut down on new starts, and people will find it harder to get work. And because most refurbishment and re-furnishing occurs when houses have just been bought, there will be a...
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