Continued house price drops are likely, says Capital Economics
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House prices remaining the same is the best outcome for the property market but a continued drop is most likely, says Capital Economics.
After the Halifax House Price Index reported property price drops for the third month running and the LSL/Academetrics HPI for the fourth month in a row, the economists are pessimistic.
The research consultancy firm, which has economist Roger Bootle as managing director, has produced a UK Housing Market Update.
It says: “The housing market is arguably in a more precarious position now than it was at the end of 1992.
“The house price to earnings ratio suggests that house prices are still too high. Mortgage affordability, although favourable at the moment, will come under threat from the squeeze on household disposable income that the fiscal consolidation will bring.”
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Readers' comments (1)
chris callaways | 12 Jul 2010 2:36 pm
No chance of a crash, there arnt enough houses and wont be enough houses built to do any damage. The new government has killed that from happening by mucking developers about with funding for new home sites, So if developers cant fund new projects from their capital and bank loans we will see a fall in the number of houses available in the future.
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