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oh dear™: UK house market is ‘heading for crash’

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    oh dear™: UK house market is ‘heading for crash’

    UK house market is ‘heading for crash’
    Gary Duncan, Economics Editor

    The property boom of the past ten years has left the British housing market in danger of following the slump in American house prices, the International Monetary Fund said yesterday.

    In a bleak warning, the IMF found that homes in Britain were overpriced by up to 40 per cent — far more than the overpricing in the US before the current property slump began there. The finding will fuel fears over housing market prospects after growing evidence recently that prices have already begun to fall in some parts of Britain.

    The warning came as it emerged yesterday that the Bank of England discussed whether to lower interest rates this month to shore up Britain’s growth. But there was substantial reluctance among the Bank’s Monetary Policy Committee to rush into lowering borrowing costs, with only one of the nine-strong panel voting for a rate reduction.

    The IMF report said: “The extent of house price overvaluation may be considerably larger in some national markets in Europe than in the US. The estimates suggest that a number of advanced economies’ housing markets outside the US could be vulnerable to a correction.”
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    House prices in Britain now stand at about nine times average annual earnings — up from about five times in 2001. Average national house prices have risen threefold since the early 1990s, from about £60,000 to about £200,000 now. (AtW's comment: UK houses are very small comparing to USA, £60k is a fair price for average sized dwelling)

    In its twice-yearly report on world economic prospects, the IMF warned Europe’s governments that the tighter lending conditions for homebuyers caused by the worldwide squeeze on credit could lead to a serious correction in excessive house prices.

    “The steady increase in interest rates has already contributed to some cooling of these housing booms, and recent developments are likely to have a further dampening impact,” it said.

    The IMF, however, did qualify its pessimism, saying that there were “considerable uncertainties” in its model, which did not take in key factors in Britain such as shortages of supply, boosts to prices from immigration and greater affordability due to the availability of mortgages.

    -------

    Clearly IMF does not read this board!

    #2
    "AtW's comment: UK houses are very small comparing to USA, £60k is a fair price for average sized dwelling"

    FFS Are you an idiot savant who can only understand something simple like programming?
    Is "Supply and Demand" such a hard concept to grasp?
    Hard Brexit now!
    #prayfornodeal

    Comment


      #3
      9 times income, pah! Have the included the 'income' from loans and credit cards?

      Peter has no so much been robbed to pay Paul as raped.
      The court heard Darren Upton had written a letter to Judge Sally Cahill QC saying he wasn’t “a typical inmate of prison”.

      But the judge said: “That simply demonstrates your arrogance continues. You are typical. Inmates of prison are people who are dishonest. You are a thoroughly dishonestly man motivated by your own selfish greed.”

      Comment


        #4
        Originally posted by sasguru View Post
        Is "Supply and Demand" such a hard concept to grasp?
        I know concept of "herd mentality".

        Comment


          #5
          Originally posted by sasguru View Post
          "AtW's comment: UK houses are very small comparing to USA, £60k is a fair price for average sized dwelling"

          FFS Are you an idiot savant who can only understand something simple like programming?
          Is "Supply and Demand" such a hard concept to grasp?
          Rather a fragile balance though...

          Very soon demand will slow as lenders become more hesitant about who they lend to.

          Personally, I've just bought some land in Cambridge on which I'm going to build my own house. Stage by stage, as and when I can afford it.

          Comment


            #6
            Originally posted by Churchill View Post

            Personally, I've just bought some land in Cambridge on which I'm going to build my own house. Stage by stage, as and when I can afford it.
            How very enthralling. Perhaps you can live in a caravan whilst it is being constructed and add a bit more realism to your pikey image?
            “The period of the disintegration of the European Union has begun. And the first vessel to have departed is Britain”

            Comment


              #7
              Originally posted by Churchill View Post
              Personally, I've just bought some land in Cambridge on which I'm going to build my own house. Stage by stage, as and when I can afford it.
              They you get divorced and your wife takes the house...

              Comment


                #8
                IMHO houses have been overvalued for a considerable time. What's kept the market bouyant is that MONEY has been cheap

                Comment


                  #9
                  They're is a whole generation who thinks Money is cheap, are they going to be shocked
                  The court heard Darren Upton had written a letter to Judge Sally Cahill QC saying he wasn’t “a typical inmate of prison”.

                  But the judge said: “That simply demonstrates your arrogance continues. You are typical. Inmates of prison are people who are dishonest. You are a thoroughly dishonestly man motivated by your own selfish greed.”

                  Comment


                    #10
                    Originally posted by Bagpuss View Post
                    They're is a whole generation who thinks Money is cheap, are they going to be shocked
                    Money is cheap, unless inflation rises and interest rates have to rise with it.
                    Hard Brexit now!
                    #prayfornodeal

                    Comment

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