That's The Badger

A recent report from the Bank of England shows that mortgage lending dropped significantly in July, making it the second-lowest mortgage lending month since records began in 1993. According to the figures released net lending for July totalled £86m, a vast reduction compared to June’s total of £518m. The announcement from the Bank of England ties in closely with another report, issued by the National Housing Federation, which suggests that thousands of homeowners will slip into negative equity this year. The report also states that this period of decline and negativity will likely remain for another four years until house prices return to pre-2007 values.

A number of senior financial analysts including Howard Archer, the chief UK and European economist for IHS Global Insight, and Adrian Coles, the director-general of the BSA, have suggested that the housing market is likely to remain downbeat for the rest of this year and 2011. In the Guardian Mr Archer stated that he expects house prices to drop 3% this year and a further 5% in the next year. If prices drop as economists predict, a lot of people will discover that their financial investments bought at the height of the bubble are more of a burden, than an asset.

So what exactly is going wrong with the housing market? Well firstly consumer confidence is at an all-time low. A harsh recession, rising inflationary prices and the spectre of lay-offs and redundancies, together with a climate of public sector cuts and a massive government spending review has knocked the wind out of most consumers’ sails. When people are financial scared they tend to hoard, rather than spend, hence the hefty rise in gold and silver prices over the last two years.

The dearth of willing house-buyers and the abundance of sellers looking to get out at the right time has temporarily created an imbalance within the housing supply and demand chain. As desperation and insecurity within the market increases, sellers start lowering prices in the hope that properties shift quicker. Ideally this would create a buyers’ market, but unfortunately due to the financial crisis banks and mortgage lenders have been reluctant to lend and grant mortgages, the lack of which has only helped to increase consumer instability within the market.

With prices previously reaching anywhere from 5-10 times the amount of the average persons salary, clearly something had to be done about the unsustainable and spiralling costs of housing in the UK. The principle of allowing the free market to run riot with house prices is clearly an unsuitable model for Britain’s homeowners and prospective buyers. With prices predicted to drop over the next year or two it seems that the best plan for getting on the first step of the ladder is too stick your cash back into that instant access savings account for a little while longer. Unfortunately, for sellers things are a little bit trickier, looks like you’ll all have to hold on to that nest egg for a little while, at least until the market bounces …

For well over a century the auto-industry has changed little. Since the creation of the automobile in 1885 by Karl Benz, the idea of manufacturing a horseless carriage powered by a combustion engine has remained the accepted norm. Except for aesthetics and updated mechanics, the general concept of the car remains virtually identical to Karl Benz’s original idea.

However, in recent years things have started to change. Within the last decade the notion of a commercially viable greener, more environmentally friendly car or van, has started to gain ground within the industry. As country’s look to reduce their dependency on oil and foreign powers, governments are increasingly looking towards and promoting greener technologies.

The only real opposing factor to greener vehicles has always been due to commercial reasons. As soon as a large enough proven market opens up, retailers and manufacturers are more than willing to change their established habits. Governments often offer subsidies to initiate commercial shifts, and in-fact most of the major country’s producing cars and vans have already started offering manufacturer and consumer tax-breaks, in order to help boost the burgeoning industry.

But manufacturing an environmentally friendly car or van for sale is just the first part of creating a greener auto-industry. The real challenge with making the sector more eco-friendly involves reducing the CO2 footprint created during the manufacturing process. In a step towards a carbon neutral industry, Volkswagen, Europe’s largest manufacturer of cars and vans, is stepping up to the challenge by investing $1bn into the creation of a new zero carbon factory in Chattanooga, Tennessee.

The new 6,000-acre property will produce over 150,000 cars and vans a year. The company boasts that the factory will support 2,000 jobs and a further 9,500 more. A number of important environmentally friendly systems have also been installed within the factory including a water reclamation system, a new eco-friendly painting method and a pledge to plant trees throughout the site. The plant is due to start production in 2011.

Be upstanding and amazed by the ‘Mighty Fed’