‘Another week – and another property slump warning’
A report has concluded that the housing market is at its most overvalued for 15 years and that prices could “collapse” in 2008.
The report by Lombard Street Research for The Daily Telegraph showed that house prices throughout the UK are rising far more quickly than wages are. As a result, affordability has dropped by 7% over the past year.
Diana Choyleva of Lombard Street Research said: “We are now clearly at the end of the house price boom. We think there will be a correction next year, although it is unlikely to be as severe as the last house price crash.”
However, some observers remained sceptical that there will be another crash. “I just can’t see it and sometimes I wonder if these stories are artificially generated to fill the papers,” said property expert John Mitchell.
“Don’t forget that property is a scarce commodity and current new house build completions are nowhere near sufficient to meet the booming need for homes.
“To me, this is almost a case of another week – another property slump warning, like the one a few weeks back from the International Monetary Fund.”
The prediction has come at a time when homeowners are rushing to sell property before the introduction of Home Information Packs (HIPs) on 1st June.