The real estate market is also suffering from the tighter lending restrictions requiring higher amounts of deposits on loans and the scrapping of the practice of approving mortgages for those with poor credit. House prices have also fallen dramatically so that the value of homes is at the lowest it has been in years meaning that homeowners would not be able to get the price they want for the home.

Homeowners in Britain who had previously planned to put their homes on the market have now decided against it. Most of them have decided to do their own renovations in order to increase the value of the home to make it a better place for them to live and at the same time increase the value of the home so that when the market starts to rebound they can make a sizeable profit on the sale.

According to research done by the Co-operative Bank Mortgages, homeowners are set to buy the materials for do-it-yourself projects in higher numbers than ever before. This is good news for the retailers in this market, many of whom are struggling to keep their businesses afloat in the current economic climate. As a way of drawing in more customers and sales, they have lowered the prices of their goods, making it more attractive for homeowners to buy at this time.

The Co-operative Bank Mortgages estimates that £4.5 billion will be shelled out in home renovation and upgrade projects this spring. The bulk of this spending will occur in London and estimates put the amount at an average of £200 per household in this city alone. Areas to the North East seem to be more conservative in their spending but it is estimated that homeowners here will spend about £116 on renovations.

The majority of homeowners plan to focus on their gardens by spending money upgrading the exterior areas of the home. They are well aware of the role curb appeal plays in selling a home and have decided that this is one area that they can do on their own as they get out in the fresh air. They are, of course, hoping for warm weather and sunshine in order to carry out the projects that they have in mind.

Terry Jordan, head of mortgages at Co-operative Bank, says “With the slowdown in the property market, people are looking to add value and improve their living space.”

There are also other reasons why people have taken to do-it-yourself projects for their home. Even though they are trying to add value, some of them are looking for avenues in which they can relieve some of the boredom they are experiencing, adding on rooms to accommodate a growing family or looking for ways that they can make their homes more environmentally friendly.

Recession Forcing Britons to Do Their Own Renovations is a post from: Glitec Loans

However, whilst the Bank of England has cut interest rates three times since December to try and boost the economy it seems that these interest rate cuts are not set to continue over the rest of the course of this year.

The governor of the Bank of England, Mervyn King, recently indicated that the central bank would have to take action in order to try and bring rising inflation levels back under control, and to many this means that there will be no further rate cuts this year. Just a few months ago industry officials were predicting that there would be a number of further rate cuts this year, which could see the base rate fall to around 4% by the end of the year, but with inflation having soared to 3.3%, which is way above the government target of 2%, this is highly unlikely now.

Further gloomy news came when King said that whilst inflation levels were likely to continue rising wages would increase below the rate of inflation. With consumers struggling to cope with sky high petrol costs, soaring food prices, rocketing energy usage costs, and more it is little wonder that consumer confidence levels have fallen so much. Yet officials such as Mervyn King and the chancellor, Alistair Darling, still claim that the nation is not, in fact, on the brink of recession.

However, just a few months ago the Queen herself cancelled a lavish party that was due to be thrown for her diamond wedding anniversary, and friends of the royals revealed that this was because she thought it would be in bad taste to throw such a party when the nation was teetering on the brink of recession.

A number of industry officials have said that the Bank of England needs to take more action in terms of aggressive cuts to interest rates in order to try and stave off recession and boost the economy, and this includes officials from the British Chambers of Commerce, who believe that the government is focussing too much on inflation levels and putting the state of the economy on the back burner. However, the central bank has had some support in its decision to leave interest rates on hold for the past couple of months, with officials from the British Retail Consortium stating: “Struggling customers and retailers certainly need a boost but, with rising oil and commodity prices stoking inflation to well above the 2% target, leaving rates unchanged was the wise option.”

Is the UK heading for recession? is a post from: Glitec Loans

The US Federal Reserve has already slashed its interest rates by a huge amount over the last six months, taking the base rate from 5.25% to 2.25% with rate cuts amounting to a massive 3% in order to try and stave off recession. The Bank of England has cut rates twice since December, and although another rate cut is expected in April the central bank has made it clear that it will not be taking the same radical steps as the US Federal Reserve. Whilst some industry experts state that the economy in the UK is nowhere near as bad as the state of the economy in the US, a recent move by the Queen could indicate that all is not well.

According to a recent report the Queen has cancelled a party that was to be thrown for her diamond wedding anniversary, stating that it would be in bad taste with the country on the brink of recession. Sources close to the Queen have said that she realised that throwing a lavish party would be insensitive in the current financial climate, even though the party was apparently going to be funded by friends of the Royal couple.

A friend of the Queen and Prince Philip was reported to have said: ‘It is a great shame, but the Queen does not want to be seen to be doing something so elaborate at a time of such economic gloom. The Queen decided to cancel the party because of the very real prospect that the country is about to go through a major recession. The Queen does not want to be seen to be accused of being extravagant when everyone else is worrying about their finances. There has been a lot of talk since December that everyone in Britain is tightening their belts. With that in mind, the Queen felt that it would be entirely inappropriate to throw a party on a day that wasn’t even her actual wedding anniversary.’

The Queen’s decision, and the remarks of the close source, has fuelled speculation that the country may be closer to recession than many had thought, although industry professionals still state that the situation is not on par with that in the United States, hence the decision of the Bank of England not to cut interest rates dramatically. However, the governor of the Bank of England has stated that an April cut is now more likely as a result of tighter credit conditions.

Recent additions:

• Problems set to continue in mortgage sector
• Can Long Fixed Rate Mortgages Stabilise Mortgage Market?
• Are you a homeowner on an IVA programme?
• Sale and rent back scheme still being branded a rip off
• Are Cheap Mortgages Coming Back on the Market?

Is Recession Looming? The Queen May Think So is a post from: Glitec Loans