The Property Crisis

Abstract

Scarcely had the initial, acute, crisis among the fringe banks been brought under control than another loomed up to vex the harrassed top bankers. This was the emergency which got under way in the spring of 1974 in the property world, where values began to slide under the impact of the development tax and the tight — and then unprecedentedly dear — money policies announced in the winter’s Mini Budget. Within a few months, the values of commercial property had often fallen by between a quarter and a half while, with the prevailing scarcity of finance, there was virtually no market in such development sites as holes in the ground and clusters of old shops awaiting demolition. Never since the South Sea Bubble had there been such a massive evaporation of speculators’ expectations as at that time in the previously euphoric property market.