Tuesday, Jan 02, 2007

Overvalued house prices threaten crash

Telegraph: Overvalued house prices threaten crash

Overvalued house prices threaten crash

By Edmund Conway, Economics Editor
Last Updated: 2:25am GMT 02/01/2007

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House prices are at their most overvalued for 15 years, new figures showed yesterday, as hard-pressed home-owners struggle to pay their mortgages.

And with the gloomy prospect of a record tax burden and unprecedented rises in household bills comes a warning that interest rates could rise by far more than expected.


Morgan Stanley and PriceWaterhouseCoopers warn there is a high chance of a severe fall in house prices in the coming years
A study commissioned by The Daily Telegraph shows that house prices are moving well beyond the reach of many families as the rapid growth in property values outpaces increases in incomes.

The Daily Telegraph/Lombard Street Research Housing Affordability Index shows that they are more overvalued than at any time since 1991 — when prices were plunging after the last major slide

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