British Real-Estate Crisis Looms
If you’ve been to the UK in the last couple years, you know how expensive land is there. The country is small, populous and developed, all factors that contribute to legitimate rise in land cost. But lately prices seem to have climbed beyond reasonable levels. Analysts have observed that there is not currently enough wealth in all of England to cover the mortgage costs held by the citizenry. This includes bank assets! Were homeowners to experience a “call”, there would be a huge shortfall and many would lose their homes, to banks who would then be unable to sell them for anywhere near their supposed value. The banks, in turn, would default on their obligations to foreign investors.
This alarming situation could lead England the way of Iceland – a sudden and harsh awakening to national insolvency.
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