The International Monetary Fund (IMF) has warned that the property market in UK is "overvalued" and could be heading for a decline.
Research carried out the IMF found that average rental incomes measured against house prices are far more overvalued now than they were in 1989, before the last house price slump.
British house prices have gone up by nearly 200% over the last decade, making this one of the biggest surges seen in any economy.
The average house is now valued at more than £200,000.
The report stated, "House prices are likely overvalued. In the short-term, forward-looking indicators of housing market activity suggests that house price growth is likely to remain elevated.
"In light of estimates that house prices are already overvalued, this would increase the subsequent risk of an abrupt downward adjustment."
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IMF warning over housing market
Thu, 08 Mar 2007
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