The UK 2003/2004 property bubble

UK Property prices were at an all time high in 1988, and fell by 30% in 1989/1990. Houses were reposessed by banks and building societies, and many people were left with NegativeEquity for a number of years.

Prices remained static until 1996 when they started to recover slowly. In 2001 prices were beginning to pick up and returned to their pre-collapse levels, and continued to rise, so much so that in 2004 many properties in desirable areas were "worth" double their market price only three years before.

The bubble has continued, despite a couple of interest rate rises, and many analysts predicting prices becoming static, falling slowly or collapsing.

So much speculation has occurred that it is reckoned that one in three properties have been bought to be rented out with the expectation that the property will pay for its mortgage by rent, and give a large capital gain too.