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What Do You Do In An Economic Crisis? Hold Your Nerve!

Aug 13, 2008
The crazy frenzy caused by unsafe lending through the sub prime mortgage market in the US, and subsequently its collapse has caused ripples across the world. Even US mortgage giants Freddie Mac and Fannie Mae both at the heart of the US housing market, saw their shares plunge to all time lows forcing the US Treasury to announce that they would shore up the two firms finances if necessary, making this the biggest stakeholder bailout in history.

The current problems were foreseen way back in 2005.
Writing in USA Today in November 2005, Adam Shell reported: "There are signs that the overheated market might finally be cooling. The Commerce Department, for example, said sales of new homes in October fell shy of expectations, median prices declined 5.7%, and the number of new homes for sale shot up to a record 493,000. Most real estate agents and economists are not forecasting a real estate collapse, although some doomsayers say the bursting of the 'bubble' is inevitable."

In June 2007, reporting in the Guardian, Angela Balakrishnan said: "The US housing market is continuing to deteriorate after a string of figures today showed a larger-than-expected drop in the sales of new homes along with a fall in the prices of existing homes."

It was in August 2007 that Stock Markets all over the world started to slide largely due to the cooling off of the American housing market and huge losses incurred by certain mortgage lenders. A crash was averted.

The crash of the markets in the US caused ripples all over the world. Many UK Banks invested in the sub prime market and have paid the price.

However, the picture is not all doom and gloom.
The population of the United Kingdom is now over 57 million and they live in around 24 million dwellings. According to some statisticians, by the year 2030 there will be 63 million in population and will need 29 million homes. The UK Government are on a roll with the housing market! There are all kinds of initiatives and opportunities for professionals in the industry to take advantage of the rapid growth in population and the urgent need to house them.

In July 2007, Gordon Brown had just become Prime Minister and he made this statement:

"Through this decade and right up to 2020 I want us - in environmentally friendly ways using principally brownfield land and building eco towns and villages - to meet housing need by building over a quarter of a million more homes than previously planned, a total by 2020 of 3 million new homes for families across the country. So for England we will raise the annual house building target for 2016 from 200,000 to 240,000 new homes a year."

Even though we are facing a worldwide economic slowdown, the UK Government have not abandoned their plans to provide tens of thousands of new affordable homes to first time buyers and to provide help for those struggling to meet their mortgage payments because of the unstable economic climate.

So this presents developers, house- builders, housing associations and local government with unprecedented opportunities for the future of construction in the UK. Most economic commentators are expecting the housing market in terms of house prices to continue to cool down in the UK over the next five years. However, given an accurate reading of the various economic indicators and an understanding of various market sectors, some of which may be more financially lucrative than others, the opportunities of business success is still at an all time high.

We need to hold our nerve!
About the Author
Steve Flashman is a Marketing Consultant with a unique edge! He is a public speaker published author, recording artist, media broadcaster and communications expert.
Marketing For Construction
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