House prices are too high and are more than likely to fall drastically. When of course we do not know, a recent report regarding the UK property market predicts.
The study released by Morgan Stanley has formed a model which shows how the UK property market functions. This report asks whether, all things considered, house prices are set to fall.
House prices have doubled in the UK over the last ten years. However, can this growth continue?
Less than 50% of the rise is as a result of income growth, decreasing interest rates and population growth. The remaining 50% reflects changes in anticipated house price inflation.
50% of recent house price growth has as its basis expectations rather than solid economic factors like supply and demand. This represents a possible risk of a crash.
Significant falls in house prices are necessary to match demand to supply. It is a tricky business trying to predict when.
It could be in the near future or it could be in two years time.
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House Prices Are Likely to Crash
Thu, 23 Nov 2006
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