The UK’s housing market slump will be worse then many people are predicting, according to the Liberal Democrat economic spokesperson Vince Cable.
Mr Cable maintains that many of the current estimates relating to the prospects for the property sector are overly optimistic.
He is convinced that the government and the Bank of England will struggle to control inflation and prevent millions of homeowners from facing a serious
debt management struggle.
The prospect of repossession will loom large for many families and policymakers should find a way to prevent lenders from reclaiming homes on a large scale in months to come, Mr Cable has suggested.
“Of course, the government cannot stop the market working, nor should it, but it could come up with a package of measures to stop large scale repossessions, by imposing an effective code of conduct on the creditors,” he told myfinances.co.uk.
The minutes of the Bank of England’s monetary policy committee meeting in June revealed that an increase in the base rate of interest was considered but ultimately dismissed.
By Giles Stevenson