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Mortgage Crisis Spreads Across the Atlantic

UK housing prices plunge; chancellor acts to shore up market

By Jason Farago,  Newser Staff

Posted Apr 9, 2008 10:58 AM CDT
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(Newser) – UK home prices tumbled 2.5% in February—the largest fall since the 1990s—as the International Monetary Fund warned that Britain could face a housing crisis similar to the US. British PM Gordon Brown insisted yesterday the decline was containable, but the Bank of England is now under serious pressure to cut interest rates at its meeting tomorrow, the Times of London reports.

The fall in property value is not universal: while less prosperous parts of the country saw major drops, prices in London and other wealthy areas continued to rise, albeit more slowly. The Brown government is set to meet with mortgage lenders this week, and today Chancellor Alistair Darling appointed a top banker to help "reopen the mortgage market."

Houses in the London neighborhood of Chelsea. UK home prices dove last month in a worrying sign that the mortgage crisis has spread across the Atlantic.
Houses in the London neighborhood of Chelsea. UK home prices dove last month in a worrying sign that the mortgage crisis has spread across the Atlantic.   ((c) scalleja)
A house in East London. UK home prices dropped in a worrying sign that the mortgage crisis has spread across the Atlantic.
A house in East London. UK home prices dropped in a worrying sign that the mortgage crisis has spread across the Atlantic.   ((c) amandabhslater)
UK home prices dropped in a worrying sign that the mortgage crisis has spread across the Atlantic.
UK home prices dropped in a worrying sign that the mortgage crisis has spread across the Atlantic.   ((c) katielips)
Britain's Prime Minister Gordon Brown during a visit to a flat in London, Tuesday, April 8, 2008. The Prime Minister visited the flat in north London that the owner, nurse Zoe Broadhead, bought on the government's open market home buying scheme.
Britain's Prime Minister Gordon Brown during a visit to a flat in London, Tuesday, April 8, 2008. The Prime Minister visited the flat in north London that the owner, nurse Zoe Broadhead, bought on the...   (AP Photo/Kirsty Wigglesworth, pool)
Britain's Prime Minister Gordon Brown talks with nurse Zoe Broadhead in her newly bought flat in London, Tuesday, April 8, 2008. The Prime Minister visited the flat in north London that the owner bought on the government's open market home buying scheme.
Britain's Prime Minister Gordon Brown talks with nurse Zoe Broadhead in her newly bought flat in London, Tuesday, April 8, 2008. The Prime Minister visited the flat in north London that the owner bought...   (AP Photo/Kirsty Wigglesworth, pool)
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