Ajarn Forum - Living and Teaching In Thailand - View Single Post - Is the UK property market heading for a bust?

Welshman · 20th August 2007, 17:08

The price of houses in the UK have been increasing exponentially over the past few years.

Now, it seems that, in some areas, prices are beginning to actuall fall.

With even London prices falling, could this be the end of the homes boom?

Asking prices for homes in London - seen as the engine of the property market across the country - have fallen for the first time in a year.

Five interest rate rises in the last 12 months are also cooling the market in other parts of the country, including the West Midlands, the North of England and the South-West.

At the same time, there has been a fall in the number of new homes coming onto the market, which could be a result of the introduction of Home Information Packs.

Industry leaders believe owners will be less likely to put their property up for sale 'on spec' because of the £500 cost of a pack. Over the last few years, house prices have

reached such a peak that many first-time buyers have been forced out of the market altogether, while others cannot afford to climb the property ladder.

http://www.dailymail.co.uk/pages/liv...n_page_id=1770

Add to that this article from a week or so back...

Property market in peril with houses 'overvalued by 20 per cent'

House prices are 20 per cent overvalued and the economy and property market are among the most vulnerable in the Western world to interest rate rises, it was claimed.

The warning came from experts in debt and risk at the respected Fitch credit rating company who have placed an alert against the British economy.

They believe a combination of unsustainable house prices, record personal debt and rising interest rates has created a potentially explosive cocktail.

The Fitch research, which assessed 16 major economies, suggests that the current average house price of some £211,000 is overvalued by more than £40,000.

It says the problem stems from the fact that house prices have risen some 210 per cent in the last ten years, while incomes have grown by a much lower 53 per cent.

Consequently, it argues that only a property crash or - more likely - many years of stagnation can possibly bring prices back into line with what people can afford.

Such is the weight of household debt on mortgages, credit cards and loans that Fitch considers Britons are particularly likely to be tipped into the red by interest rate rises. It listed the UK among three countries which it says are "most exposed to house price and interest rate shocks".

I sold my house last year. It had doubled in price in the space of just 7 years. It really does beg the question of how people are supposed to afford to buy and that those who do are mortgaged to the hilt with no room for manouver one way or the other.

So, is the property market headed for a bust?

20th August 2007, 17:08	#1 (permalink)
Welshman Welshman is long in the tooth Senior Member Join Date: Nov 2005 Location: Garden Homes Village, Minitmai Road Posts: 3,324 vCash: 500 Rep Power: 388	Is the UK property market heading for a bust? The price of houses in the UK have been increasing exponentially over the past few years. Now, it seems that, in some areas, prices are beginning to actuall fall. With even London prices falling, could this be the end of the homes boom? Asking prices for homes in London - seen as the engine of the property market across the country - have fallen for the first time in a year. Five interest rate rises in the last 12 months are also cooling the market in other parts of the country, including the West Midlands, the North of England and the South-West. At the same time, there has been a fall in the number of new homes coming onto the market, which could be a result of the introduction of Home Information Packs. Industry leaders believe owners will be less likely to put their property up for sale 'on spec' because of the £500 cost of a pack. Over the last few years, house prices have reached such a peak that many first-time buyers have been forced out of the market altogether, while others cannot afford to climb the property ladder. http://www.dailymail.co.uk/pages/liv...n_page_id=1770 Add to that this article from a week or so back... Property market in peril with houses 'overvalued by 20 per cent' House prices are 20 per cent overvalued and the economy and property market are among the most vulnerable in the Western world to interest rate rises, it was claimed. The warning came from experts in debt and risk at the respected Fitch credit rating company who have placed an alert against the British economy. They believe a combination of unsustainable house prices, record personal debt and rising interest rates has created a potentially explosive cocktail. The Fitch research, which assessed 16 major economies, suggests that the current average house price of some £211,000 is overvalued by more than £40,000. It says the problem stems from the fact that house prices have risen some 210 per cent in the last ten years, while incomes have grown by a much lower 53 per cent. Consequently, it argues that only a property crash or - more likely - many years of stagnation can possibly bring prices back into line with what people can afford. Such is the weight of household debt on mortgages, credit cards and loans that Fitch considers Britons are particularly likely to be tipped into the red by interest rate rises. It listed the UK among three countries which it says are "most exposed to house price and interest rate shocks". I sold my house last year. It had doubled in price in the space of just 7 years. It really does beg the question of how people are supposed to afford to buy and that those who do are mortgaged to the hilt with no room for manouver one way or the other. So, is the property market headed for a bust?