More organisations pile on to the “House prices will crash” bandwagon
More boffins have been hard at work analysing the UK property market, this time from the International Monetary Fund.
From their analysis they think that the UK housing market, as well as some other places in Europe is overvalued and likely to see a sharp downturn to bring prices back in line.
For a quote we have Charles Collyns who is deputy director of the IMF research department. he states that there are “a range of indicators that suggest that there may well be indeed some degree of overvaluation in many European housing markets, including the United Kingdom.” yet, almost in the same breath states that there is “considerable uncertainty about these estimates”.
So, as usual we are riding the fence a little here.
These estimates will continue to be interesting little titbits and something to bear in mind, however at the end of the day the only real marker is going to be when you see house prices dropping, and that will only happen when it simply becomes impossible for people to get a foot on the housing ladder. At £200,000 for your average UK property it’s not hard to imagine that this will be soon since the average wage in the UK is just over £23,000 according to the latest statistics from the government.
That means that currently the average house costs almost 8.7 times the average salary!
It doesn’t take a genius to work out that this is unsustainable, and there is only so many loopholes, and new ways of giving us credit that we can’t afford that the bank can come up with before new potential homeowners simply realise that they can’t afford a house.
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