|    FM Home   |    FM News   |    FM Forum   |    FM Blog   |   
Thursday 28th of August 2008
July 31, 2007

UK house prices 20% overvalued


by Gill Montia
”UK

The credit rating agency, Fitch, believes that UK house prices are at least 20% overvalued when compared with their long term average.

Fitch specialises in judging the level of risk attached to debt and has based its opinion on the widening gap between house affordability and income, over the past 10 years.

The agency surveyed 16 countries and found UK house prices to be the second most overvalued among the world’s developed economies.

France took first place and Germany and Japan were the only countries where the ratio of house price growth to increased income has remained within the long-term average.

Fitch has also produced an ‘overall vulnerability index’ which looks at overvalued house prices and the exposure of households to increased interest rates.

According to Fitch, the UK property boom makes the country vulnerable to adverse economic shock. It is listed third in the index, behind New Zealand and Denmark.

Despite the recent interest rate rises, total mortgage lending rose by £9.6 billion in June, compared with £8.7billion in May.

Mortgage approvals remained the same in June as in May and both sets of figures are stronger then most analysts expected.

Discuss this in the Finance Markets forums

Story link: UK house prices 20% overvalued


Add to Bookmarks:

ADD TO DEL.ICIO.US     ADD TO DIGG     ADD TO FURL

ADD TO STUMBLEUPON     ADD TO YAHOO MYWEB     ADD TO GOOGLE     ADD TO SPURL

 

 

Previous: « London equities markets mixed
Next: HBOS abandons mortgage exit fee »

Visited 698 times, 2 so far today