Falling Down
- Date: 2007-04-30 - Word Count: 297
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House prices could fall by as much as 30% over the next few years, claim experts, which could trigger a recession as currently overvalued property prices (20% overvalued according to Goldman Sachs and the highest in 15 years) are corrected. Many watchers agree that there will not be a gentle fall in prices because of the overstretched market, where affordability for houses is at its lowest level since 1991, its worse point since the end of the beginning of the last major property crash.
November 2006 saw house prices in London fall by 2.6% and although property prices rose during that month in England and Wales, the increase was much lower than previously predicted.
Some believe the house market will only slow when new buyers decide to wait and see if house prices might become cheaper in six to twelve months time. This is unsurprising as the average standard variable mortgage rate is now higher than 7%, well above the Bank of England 5.25%, this is coupled with the fact that disposable incomes are at there slowest rate since the early 80's as house prices rapidly outpacing wage increases.
Many watchers do agree that we are at the end of a house price boom, but are divided on the level of impact a ‘crash' will have, some predict that 2008 could be a difficult year for the UK housing market.
Of course, the news of a slowdown in house prices will disappoint many home owners, but for the millions struggling to get on the property ladder falling property prices will come as a relief, meaning that at last those who have almost given up on owning a property may finally be able to get a mortgage and be paying a reasonable price for their chosen property as well.
November 2006 saw house prices in London fall by 2.6% and although property prices rose during that month in England and Wales, the increase was much lower than previously predicted.
Some believe the house market will only slow when new buyers decide to wait and see if house prices might become cheaper in six to twelve months time. This is unsurprising as the average standard variable mortgage rate is now higher than 7%, well above the Bank of England 5.25%, this is coupled with the fact that disposable incomes are at there slowest rate since the early 80's as house prices rapidly outpacing wage increases.
Many watchers do agree that we are at the end of a house price boom, but are divided on the level of impact a ‘crash' will have, some predict that 2008 could be a difficult year for the UK housing market.
Of course, the news of a slowdown in house prices will disappoint many home owners, but for the millions struggling to get on the property ladder falling property prices will come as a relief, meaning that at last those who have almost given up on owning a property may finally be able to get a mortgage and be paying a reasonable price for their chosen property as well.
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